Hey Greg,
Welcome to the NAS world. I just recently swapped out my 4 bay external raid5 enclosure to venture into the NAS world.
FreeNAS is a standalone device. So even though this machine currently runs Winders on it, once you load FreeNAS it will no longer have Winders. FreeNAS runs off of a USB thumb drive. In my setup at home I have it running on a 4GB drive.
There are wonderful guides out there that will walk you through the install process. I used this one from life hacker
http://lifehacker.com/turn-an-old-computer-into-a-do-anything-home-server-wit-510023147
FreeNas also has a great manual that will explain how everything works and what it does
http://www.freenas.org/images/resources/freenas8.3.1/freenas8.3.1_guide.pdf
Now keep in mind that with your current drive setup I would recommend if its a possibility to swap out that 250GB drive with another 1TB drive so that you can setup RaidZ with the 3 drives. If possible add another 1TB drive if you can for a total of 4 drives. I find that Raid is happier if it has a nice even number to do the math with rather than odd numbers.
If swapping out the drives is not a possibility then I would setup the 2 1TB drives in a Raid 1 configuration for mirroring and then just have the 250GB one for whatever.
Now then as for the existing data. Make sure that you have a good working backup of all of the data. Since these drives are in NTFS you are going to have to format them. FreeNAS uses either UFS or ZFS for the drives.
I hope that this helps to get you started and pointed in the right direction. I've had mine up and running now for a little over a month and I wish I would've gone down this path in the first place. The options and flexibility that it provides are awesome.
Let me know if I can help you with anything else.
