While it is possible to put the music on an iPod onto an external drive, it isn't easy, and iTunes can't do it. You would need a third-party programme. Is the music not listed in your iTunes Library, and therfore, on your computer? Then all you would need to do is copy the files from their location on your computer to the external hard drive.
It should be on your computer, it's not wise to use the iPod as your only copy of your Library, since it's not designed to be a back up device.
As for copyright; this is actually a grey area, dependent upon which country you are in. In the UK for example, it is actually breaking copyright to put the CDs you own onto an iPod. But in reality, no one in the UK will be prosecuted since what they are doing is regarded as fair use. (I think these rules are about to change, in favour of the consumers.) I believe that in the USA, at least one lawyer has been trying to bring a prosecution based on "putting your CDs onto an iPod is copyright theft".
What is usually boils down to is this;
- if you are making a copy for your own use, that's okay. But if you are making a copy for you to keep, while you then sell your original CDs to someone else, that's copyright theft.
- Members of one household, i.e. brothers, sisters and children can share the music on CDs, without fear of copyright theft accusations. But if your brother moves out to his own home, then he no longer has a right to copies of your CDs.
- Making a copy, by which you make profit, or deprive the copyright owner of income, is copyright theft. So lending your CD to a friend, who then makes a copy and returns the CD to you, is copyright theft, even if you made no money from this.