120fps? What camera did this media come from?
FW800 minimum, Thunderbolt is best. You're budget will determine your limits. Will USB 3.0 be enough? It all depends on what format you're editing. If you transcode everything to ProRes, just about anything will work. Firewire 800 will work, unless you're doing a lot of compositing and/or very long projects.
Get the format you can afford. Be sure spinning disk drives (your price range) are 7200rpm! Vital!
Minimum would be FW800, next up would be USB 3.0, next up would be Thunderbolt, as far as speed. Avoid SSD drives as you'll not get much storage space for the amount you sound like you have to spend.
thanks for your answer.
So you're saying I can use an external USB 3 Drive to edit ProRes Footage in real time, effects and all?
That would be very cool!
I edit mostly skydiving footage and use the GoPro 3 Black Edition: it can do 1080p/60fps and 720p/120fps and other combinations..
You can edit that footage on a USB 1 or FW400 drive if you wanted to. The question is performance and playback. That will depend on how long your timelines are, how large your events are, and how the ProRes clips are formated. For high frame rate footage, not sure how USB 3 will handle that playback. You may want to look for a Thunderbolt drive. You'll spend more, but get much better performance. Again, your budget is going to dictate what you are able to get. You'll have to live with that performance level.
If a drive won't keep up as you'd like it to, you can always edit proxies, switching back to full resolution ProRes 422 for color grading and output.