Opinions sought: What is the optimal external hard drive setup for LP8?

I've got a MacBook Pro with only 10GB left on the HD after installation. I'm going to grab a nice big external Lacie 750 GB 7200RPM HD (via FireWire 800) solely for use with the Logic Studio suite. I have a few questions about optimal setup.
Option A: I leave the Logic programs on my MacBook Pro, and use the Lacie to record to.
Option B: I delete the Logic stuff from my MBP, and re-install all programs and content on the Lacie.
Option C: I install Mac OSX on the Lacie (making it bootable, I presume), circumvent my MacBook Pro's internal HD altogether, and run Logic from that.
Anybody? I'm particularly interested in hearing about what the issues are concerning latency and such.
Thanks in advance...
c.

Glad to see you chose "B"!
Just to clarify... I meant to say what Rohan suggested, i.e., apps on system drive, not on the Lacie.
Now, what's "content"? Well, it can be a lot of things...
• projects (including .bak song files)
• audio files
• sampler instruments and their samples (EXS)
• non-EXS sampler instruments and their samples
• apple loops
Three scenarios I'd suggest:
*OPTION 1*
Use your external drive for recording audio only. Store everything else on your system drive (sampler instruments/samples/apple loops, etc.). Also save your projects to your system drive. In this scenario your record path for audio would be your LaCie (create an audio folder specifically for each project). When you do routines saves of a project, leave the audio on the LaCie. Don't "move" them.
Thing is, you want to keep a certain amount of your HD space free and clear (I think the going figure is 20%) and this is for system use. It's important. But as you add more sample libraries as well as projects, you'll start to eat up your system HD space. But at least your audio recordings will be contained on a separate drive and not impinge on your HD space, keeping as much of it as free and clear as possible.
Anyway, if you go with this scenario, when you want to archive a project to another external HD or DVDs, you have a few choices:
a) do a re-save of the project to a new folder so that you've consolidated all of the material into one place, or...
b) do a re-save of the project to a new folder, include all sampler instruments & samples and everything else except audio; keep the audio in its own folder (just as it exists on the LaCie) and copy that to your archiving medium separately.
There are probably other strategies as well, but those are just two suggestions...
*OPTION 2*
Have TWO external drives: one for audio recording only, and another one for all other "content" (apple loops, samples, maybe even EXS sampler instruments, depending on how big your EXS library is). Store your projects on your system HD. With this scenario you keep your system HD very clear for system use.
I guess the main gist of the above two suggestions is that you dedicate your audio drive for audio. The less extraneous stuff on your audio drive, the higher your track count will be.
OPTION3
Same as above, having two external drives, but saving your projects to the second drive (not the audio drive). If your songs typically don't contain a ton of audio tracks, this should work fine.
Finally, a word about LaCie drives... I have three of them and have never had a problem. However, people who have reported problems with them are often quite vociferous in advising others to avoid them (and who could blame them?). So, just some perspective for ya.

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