Note: The following, unedited, was posted by Cary Milsap of Method-R to comp.databases.oracle.server on 3-Aug-2004. It says much of what needs to be said ... and very succinctly. Only new technology such as Apple's Xserve RAID changes what has been said below.
3. But the additional parity operations required to run RAID  produce a performance penalty. The performance penalty is so bad (4:1 for many common Oracle operations) that it begged for a solution: namely, the introduction of non-volatile cache and a complicated kernel (more lines of source code than Oracle7.1) to run it all. So, as long as the cache is big enough to stay ahead of your sustained throughput, a RAID level 5 array can perform almost as well as a well-configured array that uses levels 0 and 1 combined.