Ideally,
You should go for separate disks for the Logs if possible. That way it should be Var#1.
RAID-5 with SAN storage works great (DUAL-CORE). You should see significant performance Jump at your end. Do remember to Turn-on some key-performance variables in your database to get the best out of it. You can refer the "Best Practice guideline for Initial Cfg" from IBMDeveloperworks for that.
Thanks,
Jayanta (New Delhi, India).