Video editing is possibly the most resource intensive situation you will encounter in the home environment. As an example, I use a desktop PC with 3.2GHz CPU, 2 GB RAM, and 400GB of hard disk solely used for the video footage.
If you are capturing from a DV camcorder then the raw footage will be quite large - 13GB or more per hour of video. This is assuming the footage is full DV PAL resolution of 720x576 pixels.
Then you need to edit the video and create your final footage which may be another Gigabyte of storage required assuming you use MPEG2 as the output format...
I have no experience of using external hard drives for video capture BUT you would need to make sure that you have a good sustained transfer rate on disk writes otherwise you may drop frames during capture. By the same token, you need to ensure your laptop internal drive can cope with the transfer requirements.