|It would help to know the make/model of your motherboard.|
You don't need RAID because you have to have at least two matching drives, plus you apparently don't have a clue how to set it up. And you don't need a floppy to install SATA drivers because they're already built into W7. My advice is to remove the 20GB HDD altogether...it's old, slow & doesn't have enough capacity for W7 to be able to "breathe" comfortably. Install just the 250GB SATA HDD, boot off the WDC software disc, partition/format the drive, then install W7. And assuming it's W7 RC, hopefully you realize it's only good until next year & will then have to be removed & replaced the W7 RTM?
There is a workaround to get the RC to RTM upgrade to work, but it involves copying the entire contents of the RTM disc to the HDD, then altering one of the values in the cversion.ini file. Once that's done, you'd have to create a new W7 RTM DVD which includes the altered file, THEN you can proceed with the upgrade. It *should* work, but doing a clean install is almost always better than an in-place upgrade.
How To Upgrade Windows 7 RC To RTM