I've tried installing Carrara to an external drive and a dedicated partition.  I've also adjusted my scratch disk to an external drive and a dedicated partition.  It works fine, the technique worked with a wide assortment of software.  It also allows for creating, and maintaining multiple folders for content.  Another benefit is it makes defragging and running scan disk practical.  I can run disk utilities on my 3d related partitions and watch a movie or use another app while it runs without loss of performance.

The down side is installing content or plug-ins.  For content it works fine.  Plug-in require installation in your root drive and may be difficult to troubleshoot.  Another issue is the external interface speed.  I use my primary USB port for speed.  Another warnining is if you use the app and the external drive isn't connected the app will reset the scratch disk location to it's default path.

I use this technique because I've migrated from desktops to laptops for my computing.  I got tired of trying to upgrade hardware and have resolved to maximize what I have.