How does an external hard drive work?

Think of an external hard drive like a normal hard drive working outside your computer, they work very much in the same way. Normally (unless you are using a SCSI, PATA, or eSATA hard drive), they can be connected to your computer via a Firewire or USB connection. If you have a key-drive (aka USB memory stick), they work like a miniature external hard drive in the sense that they store date in an external format; an external hard drive is just like a large key-drive. With both a key-drive and an external hard drive, you simply connect it to your computer, and access its files. When you want to access your internal hard drive, you go to My Computer and then select the C: drive; The external hard drive is a similar process, you select it's icon (located either on the desktop or My Computer) and then you can access its files like a normal hard drive. You can drag files out of it onto your desktop, or alternatively, drag files into it to transfer files from your computer.