How to improve db performance with $7K?

Situation: An 24/7 animal hospital (100 employees) runs their business
on Centos 3.3 (RHEL 3) Postgres 7.4.2 (because they have to) off a 2-CPU
Xeon 2.8MHz, 4GB of RAM, (3) SCSI disks RAID 0 (zcav value 35MB per
sec). The databse is 11GB comprised over 100 tables and indexes from 1MB
to 2GB in size.

I recently told the hospital management team worst-case scenerio they
need to get the database on its own drive array since the RAID0 is a
disaster wating to happen. I said ideally a new dual AMD server with
6/7-disk configuration would be ideal for safety and performance, but
they don't have $15K. I said a seperate drive array offer the balance
of safety and performance.

I have been given budget of $7K to accomplish a safer/faster database
through hardware upgrades. The objective is to get a drive array, but I
can use the budget any way I see fit to accomplish the goal.

Since I am a dba novice, I did not physically build this server, nor did
I write the application the hospital runs on, but I have the opportunity
to make it better, I'd thought I should seek some advice from those who
have been down this road before. Suggestions/ideas anyone?

Thanks.

Steve Poe