It used to be the case that external drives were significantly more expensive than just getting an internal drive. These days, that's not necessarily true.
If you have a Fry's electronics nearby, hit that up. The stores often have deals that even the website doesn't. I recently picked up a 750GB Seagate (1 year warranty, though) for $220. The 5-year warranty version was $300.
Why buy a pre-built external rather than building one yourself? I've built half a dozen externals, and while it's a great way to put an old, replaced internal drive to use, it's not the most efficient. With every case I've used, the drive will spin 24/7. Externals are more efficient. In particular, I recently used a couple of Lacie drives that would actually spin down when ejected within Mac OS. None of my DIY externals do this.
In sum, try to find a good deal on an external. Chances are you'll be paying no more than a $20 premium with the right deal, and you won't have to build it yourself.
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