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As long as you swap it with the server on there should be no problems. Swap cold with a second-hand disk and it may complain about mis-matched RIS on boot.<br />
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Are you sure it has failed? Sometimes they go to sleep an a re-seat fixes permanently - sometimes they fall asleep again though and are really faulty. Don't reseat without latest firmware, there was a hangup bug re-introducing same disk in one firmware version. 
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As long as you swap it with the server on there should be no problems. Swap cold with a second-hand disk and it may complain about mis-matched RIS on boot.

Are you sure it has failed? Sometimes they go to sleep an a re-seat fixes permanently - sometimes they fall asleep again though and are really faulty. Don't reseat without latest firmware, there was a hangup bug re-introducing same disk in one firmware version.

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Removed defective drive and replaced with new drive. The array began to rebuild immediately and completed in a few hours, without issue.
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Removed defective drive and replaced with new drive. The array began to rebuild immediately and completed in a few hours, without issue.

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I am running a Windows Server 2003 DC on an HP Proliant ML 350 G3 Server with a RAID 5 configuration in which one of the drives (slot 1) has degraded/failed. I have ordered a replacement drive and would like to remove and replace with hotswap. Are there any gotchas or better yet, is there a step by step guide I can follow to accomplish this task? 
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I am running a Windows Server 2003 DC on an HP Proliant ML 350 G3 Server with a RAID 5 configuration in which one of the drives (slot 1) has degraded/failed. I have ordered a replacement drive and would like to remove and replace with hotswap. Are there any gotchas or better yet, is there a step by step guide I can follow to accomplish this task? 

One Drive Failed in RAID 5 Array

Computer data storage, often called storage or memory, is a technology consisting of computer components and recording media used to retain digital data. In addition to local storage devices like CD and DVD readers, hard drives and flash drives, solid state drives can hold enormous amounts of data in a very small device. Cloud services and other new forms of remote storage also add to the capacity of devices and their ability to access more data without building additional data storage into a device.

Storage

Servers are computing devices that are similar to desktop computers in that they have the same basic components, but are significantly different in size, configuration and purpose. Servers are usually accessed over a network, and many run unattended, without a computer monitor, input device, audio hardware or USB interfaces. Many servers do not have a graphical user interface (GUI), and are configured and managed remotely. Servers typically include hardware redundancy such as dual power supplies, RAID disk systems, and ECC memory, along with extensive pre-boot memory testing and verification. Critical components might be hot swappable, and to guard against overheating, servers might have more powerful fans or use water cooling.

Server Hardware

Storage devices include any device used for storing and retrieving digital information. Hard disk drives (HDDs) use one or more rigid ("hard") rapidly rotating disks (platters) coated with magnetic material. Data is accessed in a random-access manner, meaning that individual blocks of data can be stored or retrieved in any order and not only sequentially. The primary competing technology for secondary storage is flash memory in the form of solid-state drives (SSDs), but HDDs remain the dominant medium for secondary storage due to advantages in price per bit and per-device recording capacity. CD-RW (Compact Disc-ReWritable) is a digital optical disc storage format that allows information to be stored outside the mechanical HDD.