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Upgrade questions r/t video editing

Joined
Aug 10, 2008
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Hey again

So, Im quickly sucking up avalible HD space on my MB (120gig) I have some video files pushed over onto my External HD where I also have the time machine set up to update to...

This is a 60gig and has about 9gig left...

Im anticipating that the 70 or so Gig HD space on my MB will get filled up fast with adding video to be edited so herein lies my question

Should I look at upgrading my HD to the Max capacity (whatever that can be) or shuld I keep saving onto external HD and saving my work on there? Also can I use the 1 Terabyte Time capsule as an External HD too? Seems like a logical buy If i can work off of that and save my video etc to that and keep the 120gig internal reasonably free?

I might be completely lost here as I will admit
a) Im new to mac
b) Im new to video editing

How about this...
What would you do in my situation?
 

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