You might also look in the FAQ http://forums.adobe.com/thread/424418

Rak, I run Production Premium CS4 in a pinch on my laptop:

Dell E1705 (from 2006)

T7200 2.00 gHz Core2Duo

4GB Ram (only 3.4GB seeable on Vista Ultimate 32-bit)

256mb Nvidia 7900 GS

320GB 7200rpm drive

eSata LaCie external for media

Photoshop CS4 survives, Premiere stutters along but does run. I've taken 5D Mark II clips and used Encoder to create a few different formats and burn a DVD. So your late mode XPS 16 should fare well. Are you running 64-bit, and can you up the ram to 6GB? That would help tremendously. I would seriously consider Windows 7 64-bit when it comes out in October, I've been on it for 2 months (RC version) and it is superbly stable, walks Vista to the dock.

BTW, I did realize I couldn't survive on my laptop, and since Adobe allows two installs, I just built an i7 rig with 12GB ram and Windows 7 64-bit and a WD 10K drive. The difference is obviously huge, but in a pinch my laptop can pull me through.

Sure, I have this one:

http://www.amazon.com/LaCie-FireWire-External-301442U-Aluminum/dp/B001 KFH6K6/ref=sr_1_1?ie=UTF8&qid=1249265861&sr=8-1

And I run it via this eSATA ExpressCard:

http://www.newegg.com/Product/Product.aspx?Item=N82E16839200006

On that Amazon page you can click the dropdown list and pick the 500GB model, that's only $119 (I paid $184 last year for the 500GB, then got the 1TB for $155... prices!!). These are 7200rpm drives, and important feature.

No, you don't need the ExpressCard if you have an eSata port. I don't, so I was just showing what's available.

eSata drives aren't faster than internal hard drives (at least 7200rpm ones), but they are pretty close. The point is to NOT use the USB or FireWire ports, they are WAY slower. But for editing on a laptop you'll want a second drive for your media, with your internal drive for OS and Premiere. You can do it all on one drive in a pinch, but performance will suffer. If your laptop could fit a second internal drive then that'd be fine, but it'll be one hot laptop!

Rak, all hard drives, no matter how fast or how many, are THE bottleneck of any system, simply because they are mechanical storage. RAM and flash memory is faster by three orders of magnitude because it's electronic for lack of a better term. A hard drive has a motor and spinning platter with a head that has to hunt around for bits. Now if you RAID 19 dozen drives together like Harm () you can increase the speed of seeking data off the drives, but in the end, mechanical storage is notoriously slower than electronic. But, it's a current necessary evil. Not too far in the future, Solid State Drives will take over (when the price comes down and the capacity goes way up) which has the speed of a Ferrari 250GTO, but for now we have to use our 1974 Ford Pinto Wagon (a.k.a. mechanical hard drive) for persisted storage.

Oh, to answer your question better, your 7200 rpm internal drive is fine to install Production Premium. If you use the 500gb for your media files and for your scratch disk, you'll enjoy much better performance.  Thanks for the stars, btw! Enjoy PP CS4 when you get it.