I recently hooked up my NSLU2 to an external hard drive. A 1 GB USB drive is connected in the back.
The hard drive is housed in an ADS USB 2.0 External Drive chasis, which I had for several years. I originally used it with a different hard drive to add storage to my iSeries 1400 Thinkpad, back when it was the only computer system that I had. This chasis works with most IDE devices, including CD and DVD drives/burners. It’s functioned well, but the fan in the back sounds like it’s failing so I’ll probably replace it with a 3.5″ hard drive-only chasis (which will take up less space).