File Server - Storage configuration: RAID vs LVM vs ZFS something else...?
Solution 1:
LVM is actually quite heavily used. Basically, LVM sits above the hardware (driver) layer. It doesn't add any redundancy or increased reliability (it relies on the underlying storage system to handle reliability). Instead, it provides a lot of added flexibility and additional features. LVM should never see a disk disappear or fail, because the disk failure should be handled by RAID (be it software or hardware). If you lose a disk and can't continue operating (rebuild the RAID, etc), then you should be going to backups. Trying to recover data from an incomplete array should never be needed (if it is, you need to reevaluate your entire design).
Among the things you get with LVM are the ability to easily grow and shrink partitions/filesystems, the ability to dynamically allocate new partitions, the ability to snapshot existing partitions, and mount the snapshots as read only or writable partitions. Snapshots can be incredibly useful, particularly for things like backups.
Personally, I use LVM for every partition (except /boot) on every box I build, and I've been doing so for the past 4 years. Dealing with non-LVM'ed boxes is a huge pain when you want to add or modify your disk layout. If you're using Linux, you definitely want use LVM. [Note: This above stuff on LVM has been updated to better explain what it is and how it fits into the storage equation.]
As for RAID, I don't do servers without raid. With disk prices as cheap as they are, I'd go with RAID1 or RAID10. Faster, simpler, and much more robust.
Honestly though, unless you're wedded to Ubuntu (which I would normally recommend), or if the box is performing other tasks, you might want to look into OpenFiler. It turns your box into a storage appliance with a web interface and will handle all of the RAID/LVM/etc for you, and allow you to export the storage as SMB, NFS, iSCSI, etc. Slick little setup.
Solution 2:
ZFS is really reliable and it sure does make your storage management hell of a lot easier. As a bonus: smb is integrated with ZFS in OpenSolaris and it handles Raid very well. Wait a few days, download the by then released 2009.6 version and give it a go on a test machine. I am sure you will love ZFS.
And about your comment ZFS being new: not very new anymore!
Solution 3:
The central question is: "How important is this data?"
If the answer is "I can recreate it easily" you want RAID5, possibly with LVM on top of it for simplicity of management.
If the answer is "I can recreate it but it would take a while and people would complain" you want RAID 6 or more likely RAID 1/10.
If the answer is "Nobody does any work while I recreate it and make sure it's bit-perfect" you want ZFS/Raid-Z
Note that you're always able to recreate it. RAID isn't a backup.