I recently installed Windows Home Server 2011 and love it. However, when I try to set up server backups, it says no suitable disks are available. Initially, before I set up my RAID, it found one of my twin drives and said it would work. Once I set up the mirroring, that one is no longer available (obviously). However, I have an internal SATA 1TB drive and an external USB2.0 1TB drive hooked up. Both are recognized by Disk Management. WHS11 still says nothing suitable for backups. The two drives details are as follows:

Edit to clarify: The system partition is on Disk 0, not listed below. The two below are the two that SHOULD be available for system backups.

Disk 1: Dynamic
  "Data" (D:) 931.51 GB NTFS, Healthy
Disk 3: Basic
  200 MB Healthy (EFI System Partition)
  "Backup" 930.66 GB NTFS, Healthy (Primary Partition)

What's a bit odd is that in Disk Management the "Backup" volume does not show a drive letter, even though I assigned Z: (which is reflected in "My Computer". I also cannot make this a dynamic disk as it says it's unsupported by the device.