Internal hard drives from companies like Seagate, Maxtor etc not only cost less than the external drive in the same size they also carry a longer warranty (1 for external and 3 - 5 for internal)
I recommend that folks buy an internal drive and get an enclosure (20 - 40 dollars). You generally save a few dollars AND the warranty is many times longer.
Also for the folks mentioning RAID, RAID is great for preparing for drive failure and keeping a system online in the event of failure but it is no replacement for backups! If the partition or filesystem becomes corrupt then the mirror of it does to (on a RAID1). With RAID5 you are striping data across multiple drives (with parity for fault tolerance) but again a corrupt partition, accidental format etc and the data is gone.
I recommend a pair of drives in separate enclosures, mabye one internal and one external (made from an internal and enclosere, see above). Use one to back up the other (nothing fancy, just a simple drag and drop). Then lock the backup drive in a safe or fireproof box when not in use.