External GPU Bay

actually, I think what your thinking of was the expansion of the PCI-E standards to allow for external devices.

notice I said devices, as any pci-e will work in just about any pci-e slot (as long as it physically fits). IE, your 16x card will work in a 1x slot, if the slot is 'open ended' meaning the end of it is open, allowing larger cards to fit. Now, you wont get the bandwidth you would, but it should indeed work.. slowly.

the common thought of the external devices would be high end graphics products, due to the amount of heat and power required, and an external device could have its own power source (as you mentioned)

I think it's a combination of the two. It was some sort of device for PC's and probably laptops too which would take the Graphics Card out of the machine and run externally in some sort of bay which was powered through the mains and included its own cooling solutions/monitoring etc.

So is there anything around like that? If there is but only PCI-e x1 it doesn't seem worth even looking at. Are they still developing it then?

Here's another article on the external card adapter: http://www.techshout.com/gaming/20 [...] -unveiled/
There was some initial excitement but as ghostwalker mentioned, being limited to Pci-e x1 seemed to have created a firestorm of criticism.
I seem to remember this being projected to be in the $300 range with the default 7900GS video card. Haven't heard anything new since early last year.

i think the op was talking about this

http://www.tomshardware.com/2006/0 [...] page4.html

So far it never happened....the idea was for a PCI-e slot like PCMcia for notebooks(and some kind of adapter to use it on a desktop as well...) to be able to use desktop graphics cards externally.....

If you like the concept, then hope that AMD actually pushes the LASSO idea forward;

http://www.hexus.net/content/item.php?item=7995

Dual external PCIe links giving you full 8X+8X, and potentially the option of dual card 8x + 8x Xfire. Now that would be the external solution that would be great for laptops as well as people looking to remove the heat/power of the VPU system out of their rig.