Mac won't boot up if external hard drive is on

I just purchased an external hard drive to use for my Time Machine backups. The "installation" instructions said that with the computer off, to power up the e.h.d., then power up the computer. Well, the computer is evidently trying to boot up from the e.h.d. - the white screen/apple logo sits there for 5 minutes, then it restarts but cycles through the same thing over & over. Called Apple Care & we simply turned the e.h.d. off and booted up just fine. Then turned the e.h.d. back on & my first Time Machine backup went fine.
Shut down for the night. Turned the computer on this a.m. (external drive still on) and the same rigamarole - no successful start - happened again.
My question: should I just turn the external hard drive off when I turn the computer off (I use it only for Time Machine backups) or should I stress & sweat over finding a solution or, last resort, return it?

I would contact the manufacturer of the hard drive for a firmware update.
It is strange that this drive in particular should have a problem, as it was one of the ones demoed at the Stevenote, and shown on the Time Machine initial advertising. If a firmware update doesn't solve the problem, return the drive, and get a better rated drive that is known to be compatible with your version of the operating system.

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