I have 2 - 250GB drives in RAID 1. If either drive fails, is it possible to replace it with a 500GB drive?
Yes. However, the array capacity is based on the size of smaller drive.
You could not have the 500GB RAID 1 until you back up the data to your PC or an external drive first, and then use 2 - 500GB drives for a new RAID 1 configuration.
After the new RAID1 is configured, please copy the data back to your NAS.
The Ciphertex NAS supports Online RAID Capacity Expansion, which lets users upgrade their RAID capacity step by step without turning off the server or backing up the data to a PC first.