Since iMovie doesn't have a setting to set a folder inside the drive and stores things at the root of an external drive, you can use folders to segregate projects quite nicely.
When you open iMovie, just right click on the name of the external drive and make a new folder. Make a second folder and name them for each of you. When you open iMovie, you can collapse her folder and vice versa to avoid having to see all of the projects for the non-active user.
You could also make disk images on the drive and store them anywhere, but that is a bit more tedious for little additional payoff. You would avoid having two folders made at the root of the drive, but at the expense of a more complicated storage layer. The down side is you still have folders at the root of the external drive as well as all the project footage is in subfolders rather than in their own folder.
The remedy for this is to create sparse disk images for each set of projects and mount them before moving content to each "disk". The iMovie visual will be as if you have two drives additional drives even though they are just files/folders on the same drive.
The only warning I have is when you have multiple clips referencing the same footage - avoid moving one and not the other. Moving all the projects to the external would be extremely robust and workable, but iMovie can be a little too aggressive in moving footage to a new drive without checking to see if other projects left behind reference that footage. Luckily, things re-link nicely once you discover the missing footage error and reunite the "left behind" project with it's partner and footage.
I haven't used iMovie specifically but I have used Final Cut Pro X. And AFAIK they source media the same way.
Generally, it works excellently if you keep the following things in mind:
- The external drive needs to be "fast enough" (Basically: USB 3 or Thunderbolt)*
- To save power most external HDDs will enter sleep mode after a certain amount of inactivity. When that happens, it'll generally take a couple of seconds for OS X to wake the drives when you start poking around in iMove again.
(Optionally, HDD sleep can be disabled in System Preferences > Energy Saver but unchecking Put hard disks to sleep when possible)
Short answer
USB 3 should be totally fine for you.
Long answer
"In the old days" (or on older Macs), when using USB 2 drives, you'd run the risk of not being able to read/write fast enough. But with your use-case and a modern Mac, that shouldn't be a problem.
The main rule: In general, the faster the drive, the better. This means Thunderbolt over USB 3 and USB 3 over USB 2 and so on. Opting for 7200 RPM instead of 5200 RPM is also a great choice. In the end it comes down to how much you're willing to spend.
I can't point to an official source but Apple-Certified trainer Larry Jordan has a great article that explains the above points in detail. Also, I work at media company so I have a bit of experience on this.
*I could throw numbers at you but since you mention "camcorder" and "iPhone" as sources, I'm guessing that telling you the number of ProRes 422 streams each connection type can handle, would be immense overkill :)
Best Answer
I’m not sure I understand you… you created a Movie Project in iMovie 7 (which if I’m not mistaken is the iLife ’08 version) and now you want to move it to an external drive?
You don’t mention your Mac OS X’s version but that shouldn’t really make much of a difference.
Ok should the above be correct, you have to locate your project in your hard drive. It will be probably located in your Movies folder. Assuming you have connected your external drive and the drive is ready to use (i.e. Partitioned and Formatted) for OS X, you simply have to open two Finder Windows (use CMD + N to open a new finder window).
After you have the two Finder windows, navigate one to where you see the project in your /Movies folder. and in the other Finder, go to your external drive.
Click in the iMovie project and Drag it to the other finder window (don’t release the mouse/trackpad button). When you reach your external drive, release it.
It will be copied, not moved. When the copy is over, simply drag the old one to the Trash. :)
I’m sorry if this sounds too simple (or too complicated), the thing is that the nature of your question could be as simple as “how do I copy a file in OS X” or as complicated as “I got a new hard drive and I want to use it”. Both things are not complex, but the instructions for each are completely different. :)