I haven't run a raid 1 setup -only raid 0- but I have never heard of a performance decrease. Im not worried about reliabilitry because I have a 400gb server to back it up to.
My follow up question is this... If I plug an identical drive into the secons SATA plug will the controller driver see it and ask if I want to set it up as a RAID-1/mirror?
It doubt it. It will most likely just see it as another drive. You usually have to go into the BIOS or raid controller and configure it to the type of RAID you want.