Microsoft Knowledge Base Article 303237 contains the following summary:
A striped volume with parity, which is also called RAID-5 in Windows 2000, combines areas of free space from multiple hard disks (from 3 to 32) into one logical volume.
Parity is redundant information that is associated with a block of information. In Windows 2000 Server, parity is a calculated value that is used to reconstruct data after a failure. RAID-5 volumes stripe data and parity across a set of disks. When a
disk fails, Windows 2000 uses the parity information to re-create the data on the failed disk.
Because of this fault tolerance, administrators favor using RAID-5 volumes when data integrity and data input/output speed are both important. RAID-5 volumes cannot be mirrored, and they cannot be extended. Any file system can be used on a RAID-5
volume including FAT, FAT32, or NTFS.
NOTE: Your operating system and boot files cannot reside on the RAID-5 disks. However, you can place the system swap file on a RAID-5 volume.
