Most external hard drives run slower due to the connection to the main computer. I know that there are some external drives that you can hook up via SATA, but most drives are either USB or Firewire.
Concerning your "master folder", it might depend on which FE you're using. I'm using Mame32 and it looks for folders based off the folder it runs from (i.e. running in from Z:\VDO, the roms should be Z:\VDO\ROMS). I can move the whole thing to a different drive/folder and Mame32 still runs, I just need to update the properties in my program menu.
(P.S.: not wanting to complain, but please use punctuation. I'm not a spelling

, but it would make your posts easier to read)