Install software on an external drive?

Hi!
I just got my new MacBook. But, it is full of software from school, since I'm doing desing, movies and that kind of stuff. Almost no space left.
So I was thinking of buying an external hard drive.
- Is it posible to install and run software on an external drive?
- If yes, will it be files and settings on my mac after deleting programs from the external?
- Is an USB(2) OK? or do I have to buy one with firewire?
- Filesystem, is it right that I have to format the external drive to a mac partition?
Is there any disadvantage of running on an external drive?
Thanks!
Mvh. Tri Minh Nguyen
MacBook   Mac OS X (10.4.7)   2 Ghz, 1 Gb RAM

Welcome to the discussions and congrats on your new MacBook. You'll love it.
Yes, you can run software from an external drive.
I'm not sure I understand the second question, but there will be some settings and files that will end up on the main drive but depending on what software you're installing, it is not likely to be much.
USB 2.0 is fine. I have a USB 2 and Firewire external drives and both work fine. Firewire has faster sustained transfer speeds, USB 2 has faster initial transfer. If you plan on doing video work, you'll probably want to find a Firewire drive.
You don't HAVE to reformat the drive to Mac as the Mac will read PC formatting, but I think you'll have better stability if you initially format it as a Mac drive. Just use Disk Utility (\Applications\Utilities\Disk Utility) to format the drive.
I don't know of any disadvantage other than you won't be able to run the software unless you're connected to the drive, so you'll have to carry the external drive around with you.
There are probably some things you can do to free up some hard drive space too- get rid of the MS Office Test Drive, iWork '06 30 Day Trial, Garageband Demo Songs (\Library\Applications Support\GarageBand\GarageBand Demo Songs), Remove printer drivers you don't need (\Library\Printers), etc.
Hope this helps.

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