You'd probably want to add an eSATA card for one of those external drive enclosures. Firewire is a little on the slow side and you could do better. The good enclosures come with special PCI controller cards built specifically for managing that connection. Installation isn't hard at all - usually a three- or four-step process, not much more difficult than adding a hard drive and only slightly more involved than popping a new RAM module in.
Look for 10,000 RPM drives. They're more expensive, but probably what you want. Also, two other measurements you'd be interested in are seek time (you want a low number here) and data throughput (I can't remember the usual name for it - it's the top speed that data can be read in or out - you want a high number for this one, obviously.)
For the enclosure, if it doesn't break your budget, try to get one that does RAID. With the right flavor of RAID configuration you can get better performance.
As for wiggling the mouse, it could be that some background process that starts when the computer is "idle" is interfering with the installer. Do you use a screensaver? I suppose Vista might be running some drive indexing or other tasks in the background when it thinks there's nothing else to do.