I have put all my photos on an external hard drive which includes loads of duplicate photos, how can I organise them easily?
There are lots of apps that will help you find duplicate files. Search on MacUpdate
NO, using iPhoto does not mean moving the photos to your internal drive. I'm not sure about Picasa, but I reckon it can probably work that way too.
I want the photos all ordered neatly on an ex hard drive with each photo renamed so that it tells me what the photo is
If you want that, then use the Finder, as you are doing. If you want to use a Photo Manager then how things are arranged on the Hard Drive doesn't matter, you do everything in the iPhoto Window. It's a much better way to work, has many more organising possibilities. Perhaps you should view the basic tutorials and see if iPhoto is for you.