Mostly they are simply for storage and the occasional backup not for OSing and gaming purposes where some install games and programs to a second drive. When going to reorganize your case seeing one OS installed to drive and later moved to another plus repartitioning, reformatting, etc. you don't have to worry about where to store files since they are stored externally.
The one thing to note is that most come with a Fat32 type partition for both Windows and Mac compatibility with an auto run file and installer. Once reformatted to NTFS 2000, XP, Vista simply needs to redetect the drive if Windows is reinstalled and you recopied the software files back onto the drive.
The support sites for Seagate, WD, and others provide zip files for each model series that you simply unpack onto the drive. By simply waiting until the desktop loads for a clean install of Windows and plugging the usb cord in you often see the autoplay searching while the drive is quickly seen in the MyComputer.
This is after the reformat to NTFS seen there however on the XP desktop. But that would be seen in Vista as well.