"do I need two Hard disks just to get it running RAID"
No. The only valid RAID level for a single disks is RAID 0.
"I really didn't want to buy one of the Dell drives that came with the server, as they are a ton of money and are really small drives"
You can purchase these from third-party suppliers for usually much less then Dell sells them for, especially through the original configurator.
"So its the drive screwing with me?"
Probably. There isn't really another answer that is obvious from what you told me. Does the VD MGMT screen show "no configuration present"? On the CTRL MGMT screen, what is the package version? It is possible updating the firmware will help it communicate more effectively with the drive.
There is a big difference between enterprise and consumer drives ... as also noted by the price. Sometimes consumer/desktop drives will work, but sometimes they will not - sometimes they can be configured but fail miserably later, and sometimes they won't even show up in the controller (probably preferable to the former).