External HD vs larger internal one

Hi, my internal driver is full on my laptop. I have to either buy a new external HD (500GB/7200rpm) or change to a larger internal one (500GB/7200 or 5400rpm). I am aware the external one will be lower compared to internal one.
is it acceptable?
I think that PS will use HD only when opening and saving the photos. It uses memory and scratch disk (configured on internal one) most of the time.
I can not add the second internal HD. Only Photshop CS4 and MS office installed on this laption which is only used for PS. OS is window 7 64-bit with 4GB memory.
thanks for your help
JJCPA

Well, looks like you already know your answer.... If you only need storage, there's certainly nothing wrong with an external drive. Even large-ish images beyond 200 MB open reasonably fast via the simplest USB connection, so there's nothing against it....
Mylenium

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