If you are halfway handy with a screwdriver you can build your own as I did. I have a 3.5" drive installed in a MacAlly enclosure that does USB 2.0 (I am partial to MacAlly). I also have a 2.5" 40 Gig drive installed in a tiny enclosure that easily fits into a shirt pocket. I also have a DVD burner in yet another MacAlly (5.25") enclosure that has both USB 2.0 and Firewire. They all work great and the 2.5" setup gets toted around a fair amount. (BTW, I use all this hardware with Xp Pro.)
However, it sounds like hardware is only one aspect of the storage solution that you need. IMO, you also need to consider backing-up your portable drive and security/encryption if you have sensitive data that you would not want others to have if the drive was lost/stolen. My wife and I have a small biz and we keep our Quickbooks / TurboTax stuff on the portable drive. That stuff must be encrypted. For backups, the backup software built into Xp Pro is adequate for us. I suggest full backups once a week and differential backups EVERY evening. There are other, better backup solutions than Xp's, but it works Ok for us. Xp Home does not appear to have a built-in backup utility. IIRC, Win2K does(?).
For encryption, you can use a program like PGPdisk or Cypherix. I started out using PGPdisk. Then switched to TurboCrypt (terrible for a portable drive, but nice otherwise), and finally have settled on Cypherix...which has been working quite well since I started using it about three weeks ago. You can download
Cypherix LE for free and that may suffice for your encryption needs.
As alluded to by previous posters on this thread, a portable drive can be susceptible to rough treatment. 2.5" drives, IMO, since they are usually intended for notepad PC's, are a robust and very portable solution. I haul our 2.5 all over the place but my external 3.5's usually hang around and don't get moved much...they are just klutzy compared to the 2.5.
I picked up all this hardware from
Newegg. I'm sure you can easily build a drive yourself if you are so inclined. If I can help with more info, shoot me an IM.