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Yes, I'd definitely do that Andrew BUT my older laptop only has 1 x
USB 1.0 port. Even the backup process done a few weeks back which
saved me from disaster was very slow.
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If your lappie has a pcmcia slot, you could pop a usb2.0 card in there if you wanted to head down the USB external drive path. Seagate sells 1TB 7200RPM external USB drives for about $150 now (although they never seem to let on how much cache is on the drive). I have one of the Seagate external drives and use it on a laptop for music production and it works like a gem.
If you need to replace the internal drive in your laptop, rather than adding more space, then 7200RPM will probably give you a performance improvement.
Dean