Nick, I recently was able to successfully rebuild a blank hdb drive with raid1 on SME7.0 pre4 in VM ware with 8gig drives. I selected manage disk redundancy in the server console. Then logged in as root and ran cat /proc/mdstat. It then showed progress in rebuilding hdb. Then I decided to test on real machine and ran into same problem you did. Only thing I can see that I did different is that my two hard drives are not exactly the same, about a 400MB difference in size. Are the two hard drives that you are using exactly the same?