It appears it can.
As to what RAID level, that depends on what you are looking for. We know that RAID is not going to save our files (some still believe it will!) but only you can pick which one.
I have a iMac 3.4 GHZ with 16 GB of memory, SSD boot drive and 2TB internal. I want to attach a RAID to it (OWC Mercury Elite Pro Qx2, eSATA, FireWire 800+USB).
Is it possible to install Mac OS X on a RAID? If so, what Mac OS X version would work best (Snow Leopard? Lion?) and what RAID level would be appropriate (I am debating between level 5 or 10).
I figure if my iMac went down I can plug and play and boot up with the RAID on another computer.