Whats the best portable drive for use with iMovie?

I use iMovie on my macbook on my long commute to and from work. I have read that the best solution is to edit movies on an external drive and not the one on the mac.
What is the minimum drive speed (rpm) and minimum transfer (firewire 400 ? usb 2?) for this to work.
All the drives on the online apple store talk about transfering documents, photos and using them as backup devices and I am trying to be cautious about what I buy given a limited budget.
For example is the "Iomega 160GB Portable Hard Drive with Dual Interface" suitable ?
All advice gratefully received, thanks

I haven't seen that point.
I worked on my old iMac using just the hard drive for a while. Performance is not the issue, but space can be, which is why I moved to an external drive.
Drive performance is complicated. If you have enough memory, your internal drive will probably have better performance than an external drive. The SATA bus is a lot faster than the FireWire or USB buses.
On the other hand, if you are memory constrained and are using other i/o intensive applications at the same time, the external may perform better. You definitely want to avoid excessive swapping of your virtual memory while using iMovie or anything else. (and this is best handled by having sufficient RAM. I have 2GB.
In iMovie 08, once you have your video imported into an event, you can edit away, because iMovie is just writing pointers in the project file to the source files in the EVENT. Disk performance is more critical on import (front end) and sharing or rendering (back-end), but internal drives are more than up to this task.
Space is the issue. If you are shooting high definition footage, you can get event files of 20GB to 40GB+. That can eat up a laptop real quick.

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