I've had really good luck with Western Digital Passports which I use for virtual machines and general file storage. I pound them and have never had one fail. I also have two USB-powered Seagate 1TB drives which I have dedicated to Time Machine backups and use in alternating fashion.
However, since I run virtual machines off most of my external disks, I thought I'd try one of the new WD drives (750GB, with a silly e-ink display that I'm sure is intended to look ssswingin' hotcha but is pretty useless) that have both USB and FireWire 800 interfaces, and is powered from either. It made for a HUGE difference in speed! Approximately 2X better load times, etc., and I can run more than one VM at a time, whereas the USB bus was pretty well maxed out running one. I'm pretty happy with it. However:
o The fancy new WD drive comes preformatted for OS X and has a little chip in it that contains the WD utility software. Props to WD for not polluting the actual storage medium with their software. Grrrs at WD for the poor quality of its software, though. Fortunately you don't have to use it (except to put a label on the e-ink display). If you go for this drive, just ignore the WD software. Plug it in and use it. Ignore the little "CD" icon that also pops up on your desktop-- that's the WD chip in this particular drive, pretending to be a CD. You can't get rid of it but it does no harm. (If you get a different WD drive with their software stored on the disk itself, just reformat the thing using Disk Utility. Voila: more space, less annoyance.)
o The USB cable provided with the fancy new WD drive uses a non-standard mini-USB-ish plug, for some totally idiotic reason. So if you lose the USB cable, you're out of luck for USB, but you'll still have the FireWire option to tide you over until you get a new cable from WD. The provided FireWire cable seems to be standard on both ends. All my other Passports use standard mini-USB sockets; it's very annoying that they changed with this drive.
o I had my one and only kernel panic ever in the history of my long and intensive use of OS X recently, and it seemed to be related to the Firewire driver for the fancy new WD drive. It has not recurred but I'm keeping an eye on that. I'm running the latest driver.
o The FireWire plug is easier to accidentally dislodge than the USB plug is-- a consideration if your portable usage includes a lot of moving around with the drive connected. Disconnecting any portable drive without properly dismounting it (dragging its icon to the trash, and waiting for it to disappear) can cause data loss up to and including trashing the whole drive.
o The e-ink display is also supposed to show the free capacity of the drive, but that function stopped working on my unit for some reason.
Bottom line: the WD Firewire-enabled portable hard disk is worth its small price premium for its amazing speed, but there are some small "gotchas" you should be aware of, and DO NOT use WD's software that comes with ANY of their drives, except to manage the e-ink display if the unit has one.
The Seagate 1TB USB drives I also use seem to each contain 3.5" platters from two 500GB drives so are a bit thick and heavy compared to the Passports. Fine for Time Machine, but I don't carry them with me like I do my Passports. These drives are formatted for Windows but Disk Utility made short work of reformatting them. One became unreadable after a couple weeks' worth of Time Machine usage; dunno why. I reformatted it, and it has been stone reliable ever since. (It was all a good lesson in why one should have at least two backup drives and use them in alternating fashion.)
Whatever you get, look for a bus-powered design. Separate wall-wart power supplies can make for a cheaper drive but are an annoyance. I also recommend getting a spool of wide Velcro tape and putting a strip of the fuzzy stuff on the back of your laptop screen or the side of a desktop CPU, with a matching piece on the drive, so you can securely attach the drive. An included zipper hard case is preferable to a soft sleeve for carrying around.
You can find a wealth of USB-only Passport and Seagate drives at Costco, and I got the fancy new Firewire-enabled WD drive at Fry's.