You seem to have done the correct procedures, I don't know what went wrong there. Are those 2 160GB HDD new ?(I can see they're identical.) Have you tried installing Windows on the RAID 0 array after disconnecting the single 250GB HDD first?
I have a similar setup on one of the power PCs but RAID 0 on 2 SSDs & a single 300GB WD VelociRaptor on its own, it works perfectly alright & am able to choose which drive to boot from using the boot menu, now preparing for putting in extra 4 SSDs for a separate RAID 5 setup & get rid of the WD VelociRaptor(too slow), should be fun.