How is the external hard drive going to be connected? You could create a
bootable Linux live disk and boot from that in the CD drive. It is a
usable OS, Ubuntu has some nice features and is a complete OS on CD,
then you can have your home directory on a USB or even several different
/home directories. Now it is somewhat slow but usable. You did say the
BIOS was old to support booting from USB so that lets out even large
external hard drives. What other means of adding an external is there?

I have a couple of options for connecting the HD. Right now, I
can use an external drive attached to the USB port, or I can get a PCMCIA-to-IDE
adapter and hook a 3.5" drive up to that as the BIOS does support booting from a
"card". I do not know whether or not the PCMCIA port would be any faster than
the USB 2.0 port.

My main use of this machine will be to use it as a PVR. As I recall, the last
time I ran Ubuntu on this machine, I had to use ndiswrapper to get the wifi to
work, so I think this rules out running a live CD from a USB stick or from a CF
card in the PCMCIA slot, but I could be wrong.

I have tried my GRUB CD and it does indeed boot, but I cannot yet confirm that
it transfers to the USB port.

I wondered how you knew i was trying to run off an external hard drive.

(It works for me - but of course it is configured for the computer
that I built it on and so is not all that transportable).