Oh, one tip if you go software side. Don't RAID the hard disk. Create partitions on the disks and RAID those, making the partition a bit smaller then the hard disk. That way, if one of your Brand X 120gig drives fails, and only a Brand Y 120g can be found later. There is a possibility Brand Y 120 gig will be a smidge smaller then Brand X, and by using a smaller setup of space on the old disk, the new one should still work into the array.

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I do have enough spare HD's to run 4 x 250Gb and 3 x 120Gb arrays

Another advantage to using partitions would be for this setup. Instead of making two separate arrays with two separate disk groups, you could make 2 arrays across the entire 7 disks. IE, 120gb in use on all 7 disks for a 720gig usable RAID chunk, then with the 130 gigs left on the 250s, turn that into a 390 gig usable array.

I'm currently doing something similar in my server. It has 3 160 drives, 1 200, and 1 500. All 5 are in the 160 gig per disk RAID. The 200 is in there because I couldn't find another 160 to replace the second failure in the array, and the spare 40gigs of space ends up being used as a quick and easy place to store a few backups of /etc and other critical areas of the root drive to allow me to restore to an earlier time. The 500 uses the spare space it has as my "unraid" share. This gets used by my laptop and Mac Mini as a backup space. I'm tempted to go grab another 2 500 gig drives and expand that unprotected space into a proper raid 5, along with expanding the 160 gig per disk raid area I have.