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Sony - PS3 HDD Expansion - View Post

The external drive is useful for storing videos, pictures, and music. You can also make back-ups of some data like game saves and I think the PS3 can backup all it's important data to an external hard drive (or pen drive) if you want to reformat it's hard drive. It can't store your game demo's or PSN games or stuff like that.

For example, I can have my internal hard drive store all my demo's, PSN games, and such while I can hook up mine or my room mate's external hard drive to watch some videos or something like that.