System on USB SSD, user data on internal drive?

I have an iMac with a 1TB internal spinning disk at home, and the same system at work except it has an internal SSD. The SSD system is unsurprisingly much more responsive and it's increasingly painful to use the machine with the spinning disk.  I looked into replacing the internal drive with an SSD but it is cost prohibitive, both to buy the drive and have it installed (I considered doing it myself but the how to video is beyond my skill level). So I started to see if there are other options. I have between 500 GB and 700 GB or user data, much of which is my iPhoto and iTunes libraries.
One idea I had was to either (a) buy a small external solid-state drive and hook it up via USB or Thunderbolt, and install the system on that, but have my user folder (or possibly even just my iTunes and iPhoto libraries) on the internal drive.
Another idea is to buy a giant USB key (128 GB?) and install the system on that, and just leave it mounted all the time.
Other than the fact that I'd have my data spread across two disks, are there reasons why this is a bad idea?  And does anyone have any insight into whether or not it would improve performance noticeably?

Stick to Thunderbolt. It is faster than USB 3.0 in actual use. Seagate sells a small Thunderbolt adaptor - Seagate STAE133 Ext.
I can recommend the OCZ Vertex 3 series or the OWC Mercury 6G series. The former can be purchased from many different vendors like Newegg.com. For best performance you want to enable TRIM using Trim Enabler 3.2.2.

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