an external drive offers cost savings over NAS devices. Depending on the NAS you would consider, these have some advantages in certain applications. If you want extra storage on a network with multiple PCs a networked device might be a good choice. They offer some management and security features depending on what you get. Some are expandable as well and some come with XP imbedded but I doubt these would be simple solutions for home use. As for speed, I don't see that as an issue with either since data transfer can just happen in the background.