This question is a special case of "What happens to my data if a drive fails?" I should write a FAQ. :)
Here's what happens (and it's true for any drive, not just your system drive):
Shares: If all your shares were marked for duplication, you will lose no data from your shares. If a share didn't have duplication set, you will lose data if any files in that share were stored on the failed drive. Windows Home Server will normally help you through this somewhat, but you don't get a comprehensive list, I'm afraid.
Backups: The backup database is not duplicated. If any component of the database was on the failed drive, you will lose some or all of your backups. What's lost will vary; use the database repair wizard and it will do what it can. This is by design; the database is huge and is usually the largest single consumer of disk space on your server. In addition, you still have your home PCs, so you can just back them up again. (While I agree with this philosophy, you may not.)
Add-ins: Windows Home Server offers the ability for an add-in to store it's data in the storage pool, and in addition the add-in can set a flag that will enable duplicaiton on that stored data. So whether you will lose configuration/data from your add-ins depends on the add-in developer; if they didn't store configuration data in an appropriate location, or if they stored it without duplication, you may lose data here.
System drive specific: You will have to reinstall add-ins. You will have to recreate users. You will have to re-join computers to your server, which may require you to uninstall the connector from one, then use the original connector CD (this is likely to be required if you have an OEM server, not if yours is home-built).
Non-WHS data (such as applications you install using remote desktop): will be lost if it was stored by you or the applicaiton you installed on the failed drive. This includes OS customizations that Windows Home Server doesn't expose in the console, added software such as media or database servers, etc.
I'm not on the WHS team, I just post a lot. :)
