The external vs. internal thing -- it may depend just how much data you're looking to shift around. I tend to use my external drives for backup etc. but I think rotwang actually uses at least one as a "working" drive (he may be able to elucidate further on this). I probably wouldn't use an external drive as a "working" drive on my desktop PC, given that a lot of what I do on it involves working with large files (photos) but if you were mostly working on smaller files it might work.

Can't remember what we bought last time for hard drives but it might have been Samsung (they were 1TB drives, anyhow), and that was six months or so ago.