The next question should be 'what kind of files?' if they are not iTunes supported then you will need to hack it.
Or, of course, convert the files. This is a good point, as the OP should be aware that the
TV is fairly specific about the file types and resolutions that are supported (without hacking). See the 'Video formats supported' section
here.
Regarding the external HD, I can cast another vote for using the external hooked up to your computer. Without hacking, your content can be stored wherever you want, as long it's included in your iTunes library (you should know that the contents of your iTunes library do not have to be consolidated, meaning they don't have to be stored all in one place), and can be read and streamed fast enough to support the necessary data rate for viewing. My entire iTunes library is on an external HD connected to my computer, and it works great.