If your Windows box has room for at least 5 drives, you can put windows on 1 of them and use the other four drives for RAID 10 and use the RAID volume for storage of the VM files for your Linux guest. If you have tape or other backup mechanism and don't want to invest in 4 additional drives, you can try RAID 0 across 2 drives. You'll still want your OS on a separate physical drive than where you store your VM guest.
If you've got CPU cycles to burn, software RAID should be just fine (i.e, a quad core or dual quad core system). Generally, VM guests want as fast a disk sub-system as you can give them; the more/faster spindles the merrier.
In terms of virtualization software, I would recommend VMware Workstation.