Quote: These usually plug into the PC via USB ...............
No, they do not.
They plug into the IDE or SATA cables on the mainboard.
I advise against an external USB hard drive unless you are constantly moving it between PC's.
External drives are more expensive, slower and overheat in their cases.
It's easy to add an internal drive, just two screws, (four if you are feeling insecure), two plugs and a jumper cap placement. Ask the supplier for 2 screws, he'll have some on the floor in the back room

The only thing that is critical is the jumper cap placement on the drive itself. If you don't know how to set the jumper, just ask.
You should get nearly twice the drive size with an internal device over a similar priced usb device. The USB adds system overhead and performance loss, then there is the heat issue........ they never have good enough ventilation.
Chop a 200gb drive into 2 or 3 partitions (or whatever you feel is convenient), it assists in managing large drives.
You may want a 30gb first partition, then a 60gb one and make the final partition a 90gb.
The 30gb can have a windows install with plenty of spare room, (the windows install can be active as master drive or a backup in case you other drive fails). The 60gb second partition can be a working drive, and the 90gb drive can be a permanent storage drive...... just to give you a model to think about.
A 200gb drive is gonna deliver about 180gb actual.
Partitioning can be done with manufacturers software or easily with a windows installation disk during the setup routine. Windows XP also has a partitioning utility plugin so you can do it from windows while the drive is hooked up as a slave device on the cable.