I, too, read many horror stories about external USB hard drives. I also agree with Steve that many of the issues were probably user-created, like treating a drive that isn't intended for portability as a portable drive.
For the last 6 months or so, I've used a 120GB "Diskgo" HDD manufactured by Edge Tech Corporation (http://www.edgetechcorp.com/). I've got almost 50GB of MP3 files stored on the drive. To this point (knocking on wood here) I've had no issues with the drive and find myself very happy with it.
Read/write speed is good and the drive has exhibited great reliability to this point. The cost of the drive, especially when coupled with a manufacturer's rebate, was quite reasonable.
Hope this helps!