Can I setup a single Sparsebundle in RAID 1?
You can setup a RAID 1 mirror over FireWire and connect the internal/external drives. However, I wouldn't recommend it.

First, you'll need the same size drives to do the mirror. Second, the speed of both drives will be limited by the type of connection to the external drive, so if its USB, the computer will run at USB speeds. If you are just using this iMac for backup, that may not be an issue, but it's still going to slow everything down.

RAID mirroring is intended mostly for much faster eSATA connections, as that keeps everything at nearly native speeds. What I might recommend in your case is to buy an external RAID and use that for backup. That way you aren't locked in to the internal drive on the iMac, and you can always move it to a different computer if need be (especially in the event of a restore, as it'd be faster plugged directly in than over the network.