Project location -- internal or external drive for preference?

I usually like to keep my projects on my internal hard drive, which is an ATA Maxtor, and my media on an external drive. Many people keep their projects on the external drive with the media. Does this increase speed?
(of course I back up on to several different sites)
Thanks

The project file only contains pointers to the media and is a relatively small document.
If you keep it on a separate drive, the benefit is not speed, but the fact that you can use it to recapture the media, should your media drive cease to work.

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