Have you removed programmes you don't use? Made sure there are no duplicate programmes? Java is a nightmare for installing new programmes instead of updating, for example.
Delete all system restore points - that can take up a LOT of space.
most motherboards allow multiple hard drives to be installed internally. My own can accomodate 2 IDE drives and 2 SATA. If you prefered internal to external of course
My two 80 gig IDE HD's are nearly full, so I'm installing a 160gig SATA hard drive, not a big job, either do it yourself or get PC shop to do it. internal are cheaper than external as well, I imagine it would be faster as not having to go through USB!!!