I have no experience with the RAID setup, but the Win 7 Backup and Restore utility will make a backup image of your system. It can then be restored to a different hard drive, so I would hope it would work on a RAID setup, but I have no way of knowing for sure.
Will it fit on a 500 G drive, depends on how much data you have, but the restore process puts it back exactly as it was found with the original partition sizes.
After you make the image, you might want to test it by restoring it to the other 1TB drive first.
I suppose you have the RAID drivers and know how to add those during the install...