WHS has a strange way of handling storage, JBOD is the closest explanation. Basically, you can throw any number of disks of any size into the pool. it will then be seen as one giant drive. It then creates a few shares for you on the server, accessible by any of your PCs. These shares (and any others you create) have a simple checkbox that says 'enable duplication'. After enabling, any data in that share will be stored on more than one physical disk, in case of a head crash on a drive.
It will also backup any/all of your machines. After the inital backup, it just does a nightly 'diff' that takes less than 15 minutes. It then keeps each backup from the last 2 weeks, one back up a week for the 2 weeks after that, and one backup from the last 2 months. It's hyper slick.
It will also allow you to setup access to your movies and music over the internet by giving you your own website at windowshomeserver.com (or something like that, I forget the domain name). If you want to enable it, you can even RDP any machine on your local network from that site.
And finally, its got a plugin system and quite a few free plugins available.