WHS does not work that way, when it backs up your system it is backing up your entire system. However If you want you can selectively choose which folders to backup, like you might want to ignore your download folder if that folders contents changes
a lot.
When WHS does subsequent backups it will compare the last backup with the current files on your system, and only copy the changes, so subsequent backups are much quicker.
If one of your drives failed then you should be able to just insert the restore CD, and restore the files/folders that were corrupted because of the drive failure.
Personally the way I use my system is that I have a smaller drive in my Desktop and Laptop, and I put all of my media on the server. Then my server is where I put all of my large drives for storage.
So in your case you may find that it's more efficient to leave your OS drive in your PC, move all of your media off of your storage drive, and save it on the server shares, then take that storage drive out of your PC, and add it to the server storage pool.
Once you've got that done you can turn on folder duplication, so that the server then has 2 copies of that folder (you need at least a 2 or 3 drive setup for this)
