What external hard drive fits my needs???

[risherwood]

Hey everyone I just needed some opinions on what hard drive I need. I edit a lot of hd dslr footage in adobe premiere and after effects on my 2011 quad core 2.5 imac (500gb hdd and 12gb ram). I was looking into buying an external hdd since i only have about 130gb free after owning this computer a few months. Lots of people are telling me to get an OWC 7200rpm firewire800 1tb drive thats around 180 to use a scratch disk....can I even utilize a scratch disk using premiere and after fx and illustrator? Im a little confused on what a scratch disk even is and how it could help speed up my computer/free up storage. I know it has something to do with storing temporary files, but how does it all work? Can i partition my external hard drive for scratch disk and for permanent storage? How much would i need for scratch space? Not that much right? If someone could help explain things for me I would greatly appreciate it.