It seems that I've maxed out the tiny 2 GB hard drive in my Power Mac 9500. I do have an external USB drive, that only works with 1.1 (OS 9), which transfers at .5 MB/s approx. ... found that the internal/external SCSI bus can achieve upto 5 MB/s, and even as high as 10MB/s with Fast SCSI.

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Why not simply upgrade to a Firewire/USB PCI Card which can be found relatively inexpensively these days? That will significantly improve your bandwidth over either USB 1.1 or SCSI. In fact, you could get yourself a network drive and use a FAST Ethernet card to get 12 MB/s, though Firewire is much faster and does not require OS X. All of these options give you forward compatibility.