most mp3 players work just like an external hard drive, i have all my mp3s and a bunch of important files backed up on mine, and most of those connect via usb. it doesn't matter what type of usb connection you have on your computer--if you don't have 2.0 it will work just fine, but the transfers will be slower. usb 2.0 was introduced around 2001, so if you bought your computer after that it will probably have 2.0.
do you need your hard drive to be portable? because if thats not a concern, internal hard drives are much cheaper and work faster, and less likely to be damaged by flying objects, drunk roomates, etc. they're relatively easy to install, but if you're worried about that it would be pretty cheap at any computer shop. if you go this route, you'll have to figure out what type of connection your computer has for hard drives. most pcs have IDE connections, but this page looks like it has some tips on how to figure out what you have:
http://www.seagate.com/support/kb/disc/howto/interface_know.htm
as for brands, i've had very good luck with western digital and maxtor drives.
another option is to get a dvd burner, you can fit copious amounts of mp3s on one DVD (something like 4 gigs). the downside is having to swap out discs when you want to listen to certain songs and the fact that DVD-Rs are still pretty expensive, but just think of all the movie piracy you can perpetrate...
whatever type of drive you decide on, my broke ass recommends
http://www.pricewatch.com, you can find some pretty great deals.
hope this helps...
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