Xserve RAID is a Fibre Channel Storage Area Network (FC SAN) storage hardware product, and it has been discontinued. The replacement product is the Promise SAN storage controller series, and that is probably out of your price range.
As for RAID...
RAID-0 is also known as striping. Clumps of data are written to each disk, so you end up with the aggregate speed of two disks. But if one disk fails, you're rolling in your backups.
RAID-1 is also known as mirroring or shadowing, and you can survive the loss of one disk. Read performance is decent, write performance is slower as you have to write to both disks.
RAID-5 is a format best avoided; it's an old scheme from when disks were dinky and expensive. This format engenders massive I/O recovery loads on failures (approximately 80% of your total I/O bandwidth into the array is consumed for hours, and potentially as long as overnight for a bigger array), and the load increases as disk capacity increases, and (surprisingly) prone to blowing a second disk during recovery due to the I/O load, and leaving you with a catastrophic array failure. The bigger your disks (or the more unstable your disks), the more likely a second error will arise during recovery, meaning that RAID-5 is a format best avoided. It's comparatively slow. The Apple hardware RAID-5 controller performance isn't comparable with mid- or upper-end SAN-based controller RAID performance, in my experience with both. (Various of those SAN controllers have fully virtualized storage, so the whole concept of RAID is, well, rather different.)
RAID-6 (various names) is a variant of RAID-5, with additional replicated data. If you want RAID-5, then RAID-6 is usually a better choice as it's less prone to blowing a disk during recovery.
RAID-10 is a combination of RAID-0 and RAID-1, where you have striping across a mirror. It's a decent-performing RAID controller, and it doesn't have the massive recovery load.
RAID-50 is a combination of RAID-0 and RAID-5.
http://en.wikipedia.org/wiki/RAID
RAID is not an archival strategy. If your data is important, you need a copy not on your RAID array.
Best bang for your money is probably a used Intel-based server of some ilk; the QPI-based Xeon boxes are screaming-fast boxes. A box swap for whatever G5 box this is. Spending a whole lot on a G5-class box isn't going to be particularly effective.
Best "cheap" bang for your money is probably a SSD; your existing capacity is in the same range as the entry-level SSD drives. A disk upgrade. Below that, you're left with either an internal upgrade, or (depending on which G5 box you have) a PCI-X-based, or a FireWire-based or USB-based external storage, in decreasing relative order of performance.
As for home recording, if you're running a G5-class box, then pretty much anything out there will work; performance will probably be adequate. Once you figure out what your I/O load and your CPU load might be, you'll probably either be happy with a minimal (disk) upgrade, or you'll be looking for a new box. You'll inevitably be looking at a box upgrade over time as the PPC gear falls off the supported list for the products you're using, however.