This is how I see things:
First check that your PC has a USB version 2 port. (If it's no older than 2 or three years then it probably does, but best to be sure.) If it does then that is your best bet for a connection to use for an external drive.
You then have a choice between a pocket size hard drive that powers itself directly from the USB port or a "desktop" size one that still connects to that port but also has an external power supply and needs its own mains socket.
£100 + VAT (very roughly) gets you about a 160 GByte external drive with power supply or 80-100GByte in pocket size, £50 gets you about 80Gbyte "desktop" or 40GBytes in pocket format. Try www.ebuyer.com if you don't have a preference for a supplier.
Whichever format size or manufacturer you pick, it really is then just a matter of plugging it in. Windows XP should immediately recognise and be able to use the drive.
I'm sure other people will chip in with their advice too.
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