What kind of storage for digital footage?
Don't trust any hard drive to be reliable! Always backup your footage, you can not trust any HDD, doesn't matter how reputable the manufacturer is. There are always monday batches. HDDs WILL fail at some point, so ALWAYS make backups.
Bear in mind that you might find a RAID solution nice to use but that's not a real backup, backup drives are disconnected and are not running with your "live" drive, otherwise you might end up with all your drives failing together, including your backups.

I recommend going for at least 2x3TB drives, they have a lot better price per GB than 1TB drives. Though 1TB drives tend to last a tad longer on average but thats not worth the much higher price in my opinion. If you want to invest more for higher product life, don't buy standard desktop drives but instead a workstation or server HDD. For Western Digital (WD) that would be the Red/Black/Purple series. Seagate has a few 24/7 Surveilance HDDs that are also more reliable.

In terms of speed. I'm guessing you are using USB 2.0. An alternative is USB3.0, the speed of that exceeds the read and write speeds of any HDD. If you are a Mac user you also have Thunderbolt in most newer products but external HDD cases for that are a hell lot more expensive than USB 3.0 cases but they have the advantage of daisy chaining, which means you can connect many external drives to one port without a hub if you need multiple drives connected at the same time.

In terms of what is better, external or internal. For HDDs that doesn't really matter anymore in terms of speed, as long as you get a case with a quality controller and dont use USB 2.0 or Firewire. It depends on what suits you better. A case is of course more portable but there are also hot swap cages for backups that are installed like DVD drives.
Choose what you prefer.

And a general advice, never buy a complete solution where you buy a hard drive already enclosed in an external case. You do not know what you get and they are barely cheaper than getting your own case and installing the HDD yourself in a few seconds.