RAID is not for copying hard drives for duplication.
RAID is a redundant array of inexpensive disks.
The notion being if you have several disks that are all kept simultaenously in sync for the data, that if one fails, you lose nothing.
What you're talking about is a simple disk clone operation.
Yes, you can clone a 20gb drive onto a 40gb using CarbonCopyCloner or SuperDuper! and put a 40gb drive in an iBook. I warn you that it isn't easy, many screws.