Paul I had the same problem and so did Mike.
There's info on
this thread that Mike started a few weeks ago.
I found though that I can't capture directly to this external HDD since it drops a lot of frames. I capture what I can to the LT and then transfer the AVI's to the mainframe, I mean main computer.
It will also be partitioned soon so I can archive some important files too.
300GB is quite large for now.
EDIT: I hadn't read your post yet Dennis, I have to add that I don't keep all my AVI's that's why there's room on the 300G HDD. If I was to keep them all then yes the HDD would fill up quite quickly.