Yes you can add an external HDD and put data on it, programmes are best left on the main drive in my view. Depending upon the brand it might need reformatting to be compatible with the Mac using Disk Utility
Uptil now I've use an external drive for data (photos, movies etc) but am just in the process of upgrading my HDD from 160gb to 750gb, the drives are cheap and you can pay someone to do it for you. I have had a problem with the new drive installation which is why I am on here looking for help