I/O error

my Packard Bell, (Seagate), external hard drive is recognised but I cannot access it without getting an I/O error. Also when I plug it in I cannot use Win Internet Explorer, it gives me a "connection problem", but torrent downloads are working through bittorrent! I have tried to format it using Windows command line and recieve the I/O error! I am running Vista SP2 loads of memory and ram.
I feel there is a conflict somewhere between my web connection, (using Wireless Router USB) and the USB external hard drive. I have disconnected the Wireless Router to no avail, but this was the only addition to my PC and it did work at the begining, but it is strange that Internet Explorer should stop connecting when the drive is plugged in!
Can anyone help apart from advising one of the many costly SCANS, either to fix or format the external drive?
Many thanks
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More about error
  1. 1) What kind of external storage? What form factor, does it have its own power supply or does it feed through USB? Does it have two USB cables or just one?
    2) How would an external drive affect your internet connection? Did you do any troubleshooting, network analysis, etc?
    3) Did you try different USB ports?
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