Newnawatech,

It does sound like the driver isn't being loaded. If you download and then boot to the Build and Update Utility ISO, it will load the raid driver for you. You can find the BUU ISO here.
I don't think the issue is with the drive or controller based on your descriptions. So this should get the install progressing. 

Let me know how it goes.
.

Did you RUN the driver file before putting them on the flash drive? Then click on Load Driver during Setup (it won't load them automatically).

Ok thanks Chris. Will update soon

Hi Chris / Flash1932

You guys are awesome

The disk drivers have been recognised from this URL:

http://downloads.dell.com/sysman/OSDRIVERSET_w2008sbs_64_6.5_3450.exe

Today I will continue with installation. One question: When I click next > Only one disk appears > named DISK 2. Is this correct as I had initialised disk in BIOS setup (CTRL + M) as RAID 1

Thanks

Thanks for reply. Will update soon

Ok thats great. Thanks

With hardware RAID, you should only see the VIRTUAL disk, not the individual physical disks that make up the virtual disk. 2x300GB RAID 1 will be seen as one 300GB disk; 5x300 RAID 5 will be seen as one 1.2TB disk, etc.