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These days, hard drives can run anywhere from 80GB to 2TB with just about any price for any budget. For less then $100 you can get yourself a 1TB drive with capabilities of storing massive amounts of data. When choosing a hard drive there are really only two things you need to consider; how much money you want to spend and how much disk space you think you'll need. If you'll be storing your entire collection of movies, music, and games, and intend to record every T.V. show that exists, you're going to want to pick up as many 2TB drives as you can fit in your case, or attach to your motherboard for that matter. Another thing to keep in mind is that hard drives are like a box of chocolate. Gump always says, "You never know what you're going to get." Strange quote aside, it is definitely something to think about. Some HDD's will be loud and hot while others will be soft and not so hot.
RAID stands for Redundant Array of Inexpensive Disks. Basically this means you can use multiple hard drives to either increase performance (RAID-0) or increase integrity (RAID-1). RAID-0 can also be referred to as striping and RAID-a as mirroring. Other forms of RAID exist as well, such as RAID-0+1, RAID-2, RAID-3, RAID-4, RAID-5, RAID-6, RAID-7, and RAID-10. These however aren't the most popular and are more commonly used by businesses with large servers. Every once in a while you may encounter someone using RAID-0+1, because it gives you slightly faster DATA access with a little fault tolerance. Although I'd suggest sticking to the two basic forms, options are out there and you can chose what best suits your needs.
RAID-0, as stated above, is striping. It divides your data between the disks in your array. So if you have two disks, both will have half your data. If you were to look at a diagram of this, the two disks would appear to be striped with blank spots, hence the name striping. If you are using two disks your data will be divided relatively evenly, but that doesn't mean it will be accessed two times as fast. You will however notice a huge difference - RAID-0 can make two 1TB drives faster than a Western Digital Veloci-Raptor. I would not recommend RAID-0 for any HTPC as it does stress your HDD's. It makes their death not a question of if, but one of when will my hard drives die. Although some people are lucky and will never have a HDD die on them, if you're unfortunate enough to experience a disk failure while using RAID-0, the chances are high that you'll never get your data back.
RAID-1 is mirroring. You should be able to tell what it does by the name, but for those of you who aren't entirely sure, RAID-1 will take two disks and make them the exact same. This means that everything written to disk one will be copied bit for bit over to disk two. The disks are copied exactly so the two drives must be the same size, but you can have more than just two. All this does however is create more copies. RAID-1 can be extremely handy if you're trying to store data that cannot be lost. Say you have a small movie collection and you store the whole thing on a 2TB drive. If you have a few of these drives in RAID-1 and one dies. All you will need to do is take the dead drive out, insert a new one, and the controller will begin to rebuild the array.
I don't feel that any form of RAID is needed or should be used in an HTPC, but I will not stop anyone from using it. For this reason I will not cover how to setup up an array, but if you decide you must have one, feel free to ask around in the forums.
Moving on to hard drives. You will have three basic options for your HTPC build. The first and most important is internal hard drives. I'm going to suggest that this is all you use, because for most people a single 1TB drive should suffice. For those that run out of room inside the case, there are external HDD's. For the crazy users that need 20TB of overall space, there's the NAS box.
Internal Hard Drive
Every one has different opinions about hard drives, and some people won't buy one just because of the brand. I can't say I'm indifferent to this, because I tend to prefer Seagate drives. I don't mind Western Digital, in fact I often use their HDD's in builds. The one brand I will not touch is the Hitachi Desk Star. Other people love Hitachi drives and think I'm crazy for liking Seagate. What I'm saying is just about any drive will be fine for you. Get which ever model you can afford from which ever brand you prefer. No matter what hard drive you buy it will eventually die, so you should back up your data. Just don't let petty arguments keep you from buying the $89.99 1TB drive.
Hard drives are inexpensive these days, so I'm going to recommend either a 1TB or a 1.5TB hard drive. That amount of space will let you store a reasonably-sized DVD collection, as well as leaving you a little room for future storage. If you're only going to be using your HTPC for recording T.V. shows and don't plan on storing any DVD's, you might be able to get away with a 500GB drive. Just don't let the 1TB drive scare you with thoughts of "How can I possibly use that much space?" Remember, people used to say the exact same thing about 1GB. Look how far that gets you now.
External Storage Solutions:
You should be able to find an external enclosure that will fit any drive you own. If not, then you can probably sell your HDD to a museum. As for how many external enclosures you can have, well that would depend on how many USB, Firewire, and eSATA ports you have. You can purchase an external enclosure for all three of these interfaces. This means if you're a real data whore, you could probably stick 4 to 5 extra drives onto your case, possibly more depending on what motherboard you bought.
If you do end up using a RAID-1 array, the eSATA port can be very useful. You'll be able to plug an additional drive into an eSATA port and make multiple backups of your disks. Be aware the eSATA port must be on the same controller as your array.
NAS (Network Attached Storage)
Another option I will not be recommending would be to run a NAS hard drive. This is basically a hard drive that gets it's own IP address from your home network. Setup is generally easy. You'll require a wall outlet, and a router. You'll first plug the NAS box such as a Cavalry Storage CAND3001T0 1TB Network Drive into your router and then into your wall. You'll be able to store and access this box from any computer on your home network. This could be extremely useful if you own a laptop and travel a lot, because you'll be able to access your movie/T.V. files from anywhere.
Hard Disk Speeds:
Many people will choose a hard drive just because it is faster than the other. Remember, your HTPC will primarily be for storage of movies, music, and T.V. shows. So while a fast hard drive may be nice, it is not in any way needed. Your best bet would be to completely forget about the 10,000RPM raptors and pick up whatever is cheapest. If you're like me, you'll probably end up with a good 7200RPM drive.