Yes we do use raid on all our 5 servers. The unix, Novell and Win2k (master and replica) servers all uses level 5 with hotswap scsi disks. One minor and less critical application server uses level 1 and IDE disks.
The raid is only a insurance for not crashing a server if a disk crashes.
The main Disaster recovery is the daily backup to tape. The backup is often needed due to "user failure": overwriting or deleting. From time to time it is also needed due to damaged exel and word documents.
The raid has only been "usefull" once since we introduced it in our servers in january 1996, but the benefit was great. When located "remote" from available spare parts, it keept our system running with a dead harddrive until a replacement was available.
The real crashes has been mainboard failures and scsi controller failures (that connects to the tape streamer) and then the raid system had nothing to add to system uptime.
I am aware of that others has not been that lucky with harddisks that we have, and had wery good use of raid configuration to keep their server running when a harddisk crash strikes.