Two hard drives presumably means greater noise (plus possibility of second fan in external enclosure such as the Newer Tech Ministacks (open box ones are often available at a discount from Macsales.com). If you go this route, I think you will want an external enclosure that wakes and goes to sleep with main computer, not stays on all the time unless you turn power switch off. The Ministacks do this (though blue light stays on) and are nice if you need more usb or firewire ports, but fans is rather noisy when it spins up. Antec MX-100 is fanless and has appeared to wake and sleep properly for me (it also has a blue light that always stays on, but I damped that down with some blue painter's tape over light).
There can also be an ever so slight, possibly perceptible lag in how iTunes responds to changing track selections if you use an external drive.
However, external drive would presumably cheaper than large notebook hard drive.
Personally, I have consolidated all of my media on a Windows Home Server box (Acer Easystore H340), which actually works really well with iTunes over local wireless network. It shows up right away in OS X Finder and you can read and write, drag and drop, after you log in with user name and password. Plus Windows Home Server 2003 has folder by folder duplication, so if you have two separate hard drives installed in it, you can select duplication of your music folder and WHS will keep separate copies on the two separate hard drives.
If you have large iTunes library and like to search for specific tracks a lot, having the full iTunes software interface on local computer screen can't be beat. If not, AppleTV has nice big screen graphics and is very, very quiet (you can hear notebook hard drive if you ear is right next to it, but the case fan, at least for me, never spins up - top of case acts as passive heat sink. Mac Mini - older generation ones - had case fan that would often and loudly spin up during use).
If you have your iTunes library located on another Apple computer in house, you could also use something like a MacBook with remote desktop feature and control iTunes interface that way.
