Have you considered a second HDD rather than a USB connected one (assuming that you dont already have one) this will give you twice the capacity for your money. To give a partial answer XP activation allows a number of hardware changes before it jibs and you will get 30 days to contact Microsoft before it packs up. I have now used around 10 hardware changes without having to re activate. Apparently if you do exceed the limit its a case of contacting microsoft by phone, they will ask you for reasons and if satisfied will give you a new code. A friend is on his third re activation. As far as a USB connected device is concerned I assume that as its a plug and play device XP will not see it as a hardware change but dont know for sure. If you do go for a second HDD just connect it and when you reboot XP will see it and ask you if you want to format it etc you only need to tell it what file format you need (should be the same as your existing one to avoid problems) then XP will do the rest. Hope this helps.