Youngfam,  That is correct. The server will remain online. From there there you will remove the failed drive and then after about 20 seconds insert the replacement. Now the raid controller should automatically start that rebuild for you, but if it doesn't then you would need to do a manual rebuild or assign the replacement as a hotspare, which will cause it to rebuild. This is the manual for the Perc 4e/di - [URL] It has additional information regarding the rebuilds and replacing failed hard drives.  In regards to performance, the default rebuild rate is 30%, so it does effect the performance a little during the rebuild. Not to where the users would notice, unless under large load.  If you are remoting in the easiest way to monitor the rebuild and everything would be to install Open Manage Server Administrator on the server. It would allow you to monitor and manage the health of the server and the controller. You can get OMSA here - [URL] Now with installing OMSA it will call for a reboot, so you may want to schedule downtime if you wish to install it.  Let me know if this helps and answers all your questions.  
Just want to confirm before I replace failed drive with someone who has experience. I'm running openmanage  have 2 raid 1 virtual disks the 1st is showing both drives fine. The 2nd is showing a failed drive. These are hot swappable drives and I have a couple exact replacement drives on hand. It appears as simple as replacing with new drive and clicking rebuild right? Server does still stay online during rebuild of new drive correct? If server performance is diminished during rebuild could I during the day swap the failed drive with new and then log in remotely late night and click rebuild? (I can access remotely no issue there). Just never had one fail before and looking for someone who has been there and any heads up. Thanks  
PowerEdge 2850 perc 4e/di failed drive