internal vs External HD speed

Sorry, if asked before but I googled and surprisingly couldn't find a satisfying answer.

I'm planning to upgrade my 500GB HD, and have few questions:

1- Is there a difference in speed/performance between internal or external hard drive? 2- In the case of external, can I still use the 500GB internal alongside it? 3- In the case of external, when I download something do I get the option to choose which HD to use? 4- What is the maximum capacity for both internal/external, and what is the best model in general to buy?

Thanks, everyone.