D-Link engineer states otherwise. Unfortunately, haven't had chance to prove it myself.
http://forums.dlink.com/index.php?topic=41180.msg142392#msg142392
I'm going by what the device actually did and found the help documentation a little confusing (though there is a prompt before you enable RAID1 informing you all data will be lost).
I had one drive setup in a standard configuration. I inserted a second drive and set up RAID1. They were both formatted and all data was wiped from the old drive.
The tech says
"You should get an option to create a RAID 1 if you want or another standard drive with the existing 2TB drive with your data remaining intact." I'm going to assume that when they talk of keeping your data, that it only applies when setting it up with another standard drive, and not RAID'ing them. I think they just worded it poorly. A shame D-LINK doesn't outright say: RAID1 will destroy all data on both drives. But that makes sense as that's how typical RAID setups work. I'm not an uber admin, but from what I've read, RAID always requires a format of all devices plugged into it. Once its setup, however, you can swap out drives should they die and still preserve your data.