Between backups, my digital pictures, and my wife’s shopping sprees on iTunes, external hard drives are a must. Another option is to mount an internal hard drive within a hard drive enclosure. Internal hard drives are cheaper, and there are always rebates and discounts available from CompUSA, Circuit City, Best Buy, etc. It’s easy to assemble, and there are a few steps in Windows to format the drive and partition it if you like. Then it is USB 2.0 plug-and-play on any computer. This way, when the drive eventually goes TU, or you want to go bigger, you can just swap it out for another drive.
I bought an enclosure
like this, which holds a Western Digital 320GB, and another one
like this, which holds a Maxtor 500GB. Circuit City has a
web-only special right now on the WD 320GB, for $119.99 with free shipping.