How to choose the transistor and the resistors connected to it
First, redraw the schematic so we can see what is going on:



This makes it clear that the internal switch is not in circuit and is being used to control the external switch (the PNP in the datasheet).

The design procedure:


Choose your current limit resistor - this is in the datasheet.


The next step is a bit iterative:


Choose a transistor that can handle the average current as well as the peak current. Try and find a device that has a large value of \$h_{fe}\$ in saturation.
The transistor will dissipate at least \$V_{CE(sat)}\cdot I_{load} \cdot D\$ where D is the duty cycle of the regulator, so choose a package that can handle that power (you could heatsink it for a smaller package size).
Choose the top resistor: This must be sized so that it provides enough base current, \$I_B\$ at \$V_{CE(sat)}\$; this can be found in the datasheet. For instance, if \$I_{load}\$ is 1A and \$H_{fe}\$ is 10 in saturation, this resistor must be \$\lt \frac {0.7} {100mA}\$ - it is less than that as this resistor also supplies the collector of the internal switch - I would normally give that switch perhaps a few mA. That yields about \$6.4\Omega\$. Make sure you choose a device that can handle the power (I will leave that calculation to you).
Choose the internal switch bias resistor. This must be sized such that the internal switch goes fully to saturation and also must handle extra current not injected into the base across temperature (and across batches for that matter). This is given by Vin - 0.5 (current limit sense value) - 0.7V (the emitter base drop on the PNP) / assumed collector current - I used 10mA yielding \$ \frac {V_{in} - 1.2} {I_{c}}\$. As this is Vin dependent, I will leave that calculation to you.
The added external diode is now the freewheeling device, so I would choose a power schottky to keep the losses low; the current in this device is dependent on duty cycle and without knowing Vin I cannot do the numbers but a 3A rated device would easily suffice.


The thermal calculations are based on average current. I would normally choose a transistor that could take the peak current continuously; peak pulse current ratings vs. continuous current can be a bit misleading from datasheets due to the test method.