Running my .mp4 Movie files from an External Drive

Of course. An easy way is to open iTunes prefs > advanced and change the location of the iTunes library to a folder in the external HDD. I suggest calling the folder "iTunes" so you know what is in it. Click ok, then find all the movies you want to move, highlight them, right-click and choose "consolidate files." This will copy the files to the new location. After that is done open iTunes prefs > advanced and change the location of the library back to it'd original location (be sure and make a note of this location before you change it the first time). Next, make sure the files are where you want them to be, then you can locate the original files and delete them.

No, Michael Allbritton's (MA) method just copies the files you have selected to consolidate to the location you have temporarily designated in preferences. MA didn't mean "library" as being the library file (library.itl) but the "collection". Your files would still all be managed from the same iTunes library file on your internal drive but the movie files you selected to consolidate would now be referenced to their new location on the external drive.

Note the difference between these two methods:

iTunes: How to move [or copy] your music to a new computer [or another drive] - http://support.apple.com/kb/HT4527

do not confuse moving your whole folder and library with moving just media files as in

iTunes for Mac: Moving your iTunes Media folder - http://support.apple.com/kb/HT1449

Moving your movies will only apply to your current collection. If you add movies in the future you will need to make sure they are on the external drive, then hold down the option key while dragging the file to iTunes to tell iTunes to not copy it to your internal drive (which has been re-set as the location for your media folder after the move directions).

Limnos answered your questions so I won't duplicate the answers. Glad you got it sorted out.