is it possible to change the location my iphone is backed up to an external hard drive?

I'm trying to change the backup location for my iphone and an ipod touch.

Currently, my computer hard drive size is 60gig. Small by today's standards.

The back up files for my iPhone 4 and my sister's iPod touch take up a good portion of it, and i'm hoping to make use of a 1TB Seagate external hard drive to store my back up files on instead.

would anyone have any idea how to change the settings in iTunes so it will back up into my external instead of my main hard drive?

any helpful pointers would be greatly appreciated.

Jowillstak58.