First time plugging in External for TM?

Can you please tell me how I partition the External HD before I plug in the MBP. It's a 500gb with a Firewire port 800 and 400, should I use this instead of the USB, and on a first connect will it be a lot quicker? And which one, 800 or 400? MBP 2011.
The MBP is 320 and the External 500, can I partition and use the remainder for other things? If so, how would I do that easily? If it's 320 and I plug it in weekly to back up is this a long process and should I not need more than 320 despite me reading about people running out of space, Is this because it keeps all different versions instead of just the last few?
Does TM back up software like Photoshop/Office etc?
Thanks

Sorry the tall,
It's hard to know where everyone is at when they post here. And many get offended when you presume they are new to mac's.
Let me run you through my setup.
I have a 500GB Drive in my Macbook Pro. I backup my files using Time Machine to a 2TB (2000GB) External Drive. Granted, the drive in my MBP is pretty full, you will find that yours becomes full too. May that be in 2 months, 6 months, or a year. So it's best to follow Pondini's advice and get a much bigger Drive for your backups.
When Time Machine runs, it backs up the entire Drive the first time it runs. After that, it scans your Drive for files that have changed / been added. It then updates those changes to your Time Machine Backup Drive. So say if my Drive is 400GB full, I back it up, and make 10GB of changes over the next week. It's going to make the original 400GB backup, and then an updated 10GB update = 410GB total required space. Now do this over and over, it will quickly add up in space.
Now if you have a 500GB drive in your MBP, and you backup to a 320GB. When your MBP get's to about 200GB full, your going to have to get a bigger Time Machine Backup Drive, forcing you to pretty much start the backups again from scratch, and not be able to actually recover any of the previous backups you created. So you see that would defeat the purpose, and getting a bigger Drive now, will save you much headache in the future.
You can still use that one if you wish, perhaps to manually backup some important documents etc.
So does that make more sense?

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First time plugging in External for TM?

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