Hi there,
I have a DNS-321 and am running Firmware 1.03 Hardware Rev: A1 (Lucky me).
It has been running a while now with a Hitachi 1 TB, 7200 rpm, 32MB Cache drive.  Loads of data on there and tons of configuration (Users / folders, etc...).
I just purchased a Western Digital 1 TB, 7200 rpm, 32MB Cache drive to create a RAID 1 mirror. I shutdown the device, I add the new drive, I boot up.  When I log in I immediately get a message that says:
*****
HARD DRIVE CONFIGURATION :
Your new second hard drive will now be formatted. The existing hard drive will not lose any data.
 Vendor      Model      Serial Number      Size
 WDC     WD10EADS-00M2B0     WD-WCAV51311315     1000 GB
 Reconfigure to RAID 1 
*****
This is perfect because it is exactly what I want to do.  I check off the box that reads Reconfigure to RAID 1 and hit Next.  The following windows prompts me to either Enable or Disable Auto Rebuild (I've tried both options) and when I hit Next, I brings me to a window where it starts formatting.  It makes it to 5% and pauses for a few seconds before flashing to 100% and then giving the following Error message:
Hard Drive(s) Formatting Failure(Error Code:112). 
The only option here is to Restart.
Any ideas?  When I first put the new drive in it had 2 formatted partitions with data, I then blew both of those away and left unpartitioned space.  That failed so I tried to just create a partition but leave it unformatted.  That failed as well, all resulting with the same Error code.
Calling support resulted in me wasting about an hour.  I figure this forum will give me better luck.  
Also worthy of note, I was running Firmware 1.03b12 prior to upgrading to 1.03.  I realize these were basically the same thing, but figured why not.
Thanks,
-Brian