Firewire 400 external vs internal hard drive - which is better?

I’m thinking of buying a handy little Mac Mini (circa 2008) from a friend to replace my ageing, workhorse Powermac (sniff).
The only problem is, it comes with an absolutely measly 60GB HDD. I want to replace this and boot from a new drive, but am stuck between getting a new internal drive (very hard to install, but obviously I don’t have a warranty to worry about) or an external fire-wire 400 drive (very expensive in relation).
Which will run quicker or better? Internal or Fire-wire 400? (I’m a typical Mac user – lots of internet, quite a lot of iPhoto, a bit of iMovie here and a bit of Dreamweaver there)
Also, I really want to use an Iomega one that matches the mini (I’m buying a mini to save space and reduce clutter in the first place..) – has anyone used this as their bootable drive with success??

A 7200 RPM internal will be the fastest. But Firewire-400 will be pretty good, too, especially if it is a 3.5-inch model.
Assuming the current internal has no problems, you could reformat it and make it the boot drive, but keep all your data on a firewire external.
Generally drives start noticeably slowing down once more than 50% full; so if you can keep the internal (boot) drive under 50%, it might surprise you with how fast it could be.

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