In the modern world of modern operating systems such as OS X and XP, a faster hard drive and/or extra empty hard drive space can speed up your computer, at least in some ways and at some times.
a) Although RAM is (as others have explained) not storage space, all modern operating systems page out chunks of RAM to swap files, so that bits and pieces of applications sitting idle in the background can be cleared out of real RAM to make room for stuff you’re currently doing. Bits and pieces of the operating system itself also get paged out. If you are running this one game by itself, nothing else open, that’s probably not a big factor, but modern operating systems do various housekeeping and polling chores all the time, so to at least a mild extent your system is reading from and writing to hard drive all the time. If you’re downloading and installing system updates, fetching email, and recompiling database field definitions in the background while you’re playing the Sims in the foreground, it’s going to be a much bigger factor.
b) I know absolutely nothing about how this particular game is programmed, but it is entirely possible that the little modular bits and pieces of the game are only read from hard disk into memory on an as-needed basis; or that some of them are, at any rate. I’ve noticed this in some games where you complete a section or navigate out of one “place” into another — the game hits the hard disk to get the info for rendering the new scenery for the next section or “place”.
In the case of swapfiles, adding an external to a laptop won’t help much, unless you never expect to boot without the external attached. The OS is going to want a specified location to write its swapfile data to, and you can’t pick a place that ain’t there a good portion of the time.
In the case of space used for bits and pieces of the game, you might get a speed increase by having your OS on one drive and your games (and other programs) on another.
I’m using a now-elderly klunker of a laptop, a “WallStreet” PowerBook from 1998. One of the big factors that makes it still a nice enough machine that I haven’t been prompted to run out and upgrade is that it has multi-purpose expansion bays, and so I have two hard drives that are both internal hard drives (and both of them fast: 7200 RPM Hitachi/IBM 60 giggers). There is no laptop being sold right now that would not be a step down from having dual-60 gig 7200 RPM drives (or at least none that I’m aware of, and certainly no Mac PowerBooks).
In short, it might be worth it if your laptop is nearly always used as a desktop-substitute, indoors and with its external HD hooked up and available for use. If you use it on the train and plane and at the cafe table, don’t bother.