You are running out of hard drive space, not memory (memory is RAM). You need an absolute minimum of 10 - 15 GB hard drive space empty and available at all times for the OS to run properly (more is better). So how large is your hard drive and how much space is still available on it?
Any (firewire preferred) external drive will be good, most will come Windows formatted, so you will need to reformat. A good source is OWC (macsales.com) - I have two of their Mercury Elite Pros; I also have two LaCie Quadra's.
Once you get it formatted, move your space hogging files over to free hard drive space. While waiting, try to see if you can delete anything from your home/documents folders that you do not need to gain some space - do not forget to empty the trash often in between.
Here is how to move iPhoto library to an external:
As I said, in the meantime, see if you can delete enough stuff to get at least 10 GB as empty/available so your Mac doesn't crash.
Most any USB or FireWire Drive will work, the problem is ones that come at a cheap price are just that, cheap and unreliable.
Plus if your going to move your iTunes Media and iPhoto Libraries to an External Hard Drive, you really need to have a second External Hard Drive to backup your Media and Libraries on the first.
Plus you really need to try and free up at least another 10GB or so, so that you do not run into trouble trying to move your iTunes Media and iPhoto Libraries.
Message was edited by: den.thed
Sorry babowa for barging in, I didn't see your second reply. Hope at this point you don't mind if I leave mine up as well. Dennis