External hdds are usually a rip-off. It is generally cheaper to buy a IDE drive (on sale all the time too) and an enclosure (pay more than $20 for a good aluminum one and you are getting ripped off).
$100 is sort of approaching what you could pay for a 250 gb IDE drive + enclosure though, and might be worth it for you.
SJ:
I dunno if you could fit it on 128 MB. Dogscoff had a hell of a time getting it to fit on just a 700 MB CD.
Another possibility is to mod the SystemTypes.txt file so that all systems use the same image. Won't help much with PBW, but fine for single player.
SE3, however, is fairly portable. It's install size is only a few MBs.
But you might need to activate the registration on every machine you run it on... Could probably export the registry keys for that to make it faster though.