I disagree, hard drives are better, easier, faster and can't be lost if not taken care of.
You could do either external or internal.
It depends on your connectors, if your computer only supports USB 1.1, then defiantly internal as the process will be MUCH faster. If you have eSATA (stands for external SATA) then it wouldn't make a difference whether it's inside or out.
From slowest to fastest these are the connections avaible, Internal and external.
USB 1.1 (1.5 Mbit/s (Low-Speed) and 12 Mbit/s (Full-Speed))
Firewire 400 (393Mbit/s)
USB 2.0 (480Mbit/s (burst))
Firewire 800 (786Mbit/s)
PATA or IDE (1064Mbit/s)
SATA 150 (1200Mbit/s)
SATA 300 or eSATA (2400Mbit/s)
Ultra-320 SCSI (2560Mbit/s)
Fiber channel (16000Mbit/s)
The last two you'd never use in your home as they are for servers.
So in short, since you have IDE I'll assume your computer doesn't currently have Firewire, you could have either versions of USB and you won't have eSATA, as this is a card that you add to your PCI slot after you buy the computer, I have yet to see a retail computer come with it. That being said, if you adding a hard drive, internal would be far faster then external and more then likely cheaper as well.
Edited by james_8970, 14 July 2007 - 12:24 PM.