It takes a SATA drive (I or II) - I put a 500 GB Seagate SATA II in mine. It has both eSATA and USB2 interfaces to your machine. eSATA is faster and is best used with a real eSATA controller and port. However, if you don't have one of those, the package includes an adapter bracket to mount on the back of your system. It allows you to plug into a normal free SATA port on the mobo or controller, and gives you the connection for your external enclosure.
AZIO makes several similar units - for example, another that has IEEE 1394a (Firewire 400) and USB2 interfaces.