WHS is the operating system.
When you install WHS, the installation process takes control of the hard drive. It partitions it; the first 20GB partition is the C:, the second partition (about 445GB
on a 500Gb drive) is the beginning of your D:\ - the data drive.
You will want a second hard drive for redundancy.
WHS lets you duplicate data at the folder level and puts a copy of a file within the duplicated folder on both drive (or two drives of a 3 + drive system.
Google “Microsoft Windows Home Server 32 Bit OEM” and you will find that you can buy a copy for about $100.
For more info -
Getting
Started Guide