Highly recommended that you buy an upgraded internal drive unless you need more than 1 tb which is the biggest 2.5 drive out there. You will not only get the convenience of internal storage, but get a speed boost at the same time.
5400rpm 640gb http://www.newegg.com/Product/Product.aspx?Item=N82E16822136459
7200rpm 500gb http://www.newegg.com/Product/Product.aspx?Item=N82E16822148374
An external drive would require you to carry it with you if you need it. However, you would not be limited on hard drive sizes. Also, do you use virtual machines or do you have a multiple OS boot system? There was 750 and 1 tb versions announced by WD: http://news.cnet.com/8301-17938_105-10296034-1.html and I am currently trying to find someone selling them.
Official WD site for the 2.5inch 1tb drive: http://www.wdc.com/en/products/Products.asp?DriveID=685
Here is one for sale: http://www.provantage.com/western-digital-wd10tevt~7WNDO03K.htm
I believe the 1tb/750 drives are 12.5mm height drives though, so you would need to check the specs of the laptop to make sure it can take the thicker drives. Otherwise you will need to stick to the 9.5mm height drives like that 640 or 500's are available in.