What??
It's an eSATA port

I can understand why many would consider adding an external drive to be preferable, but also consider that it is still a second drive and another point of failure in daily operation. I'd rather have a single 750GB drive in a box than a 250GB internal and a 500GB external (or whatever).
As for the doing the upgrade, it's tough to imagine how it could be any easier, as long as you are comfortable opening up the Tivo and have a PC with an available power and SATA connector, though it does void the Tivo warranty.