My SSD is internal. I bought an SSD to replace the original drive when it failed, but before I could install it the HD came back to life! I replaced it anyway, figuring it was only a matter of time before it failed again. It is not a hard install, but you are taking your iMac apart to do it. I followed a number of web guides, iFixit and another that I can't remember. The hardest part is getting it open, the clips that hold it together are a pain to release. The second hardest part is removing the shielding without shredding it. Once you've done that unscrewing and unplugging the drive are pretty simple.
It went back together without any issues and booted right up. I installed SL from the retail copy I have and restored data with the migration utility from my Time Machine backup. I did this 4 months ago and haven't had a single problem.
And it is FAST. It makes my Core Duo machine faster than any of the MBPs in my house, until you try to transcode Video.