If it's external, I'm guessing it's eSATA or USB 2.0 connected, which then there's no slave/master designations.
You should be able to manage the device in:
control_panel/ administrator_tools/ computer_management/ storage/ disk_management
Right click and format the external drive and you should be able to just copy files to it for storage.
Update: I don't believe it's possible to make everything automatically store to another drive, unless you install the OS onto the external drive and make it the active drive. Which in the USB case, would be a bad idea as USB just isn't fast enough for running programs and OSs at once with a decent speed.
You can make certain programs save/store to that drive through their preferences and settings, but you can't make it a universal default as windows would probably have issues with saving/running automatic updates, programs updates, etc.
If you want to install programs to that storage just replace the "C:" or what your default boot drive letter is, to the letter of the storage drive. Though, I wouldn't suggest an external USB drive to run programs off of. If it's an eSATA you can do it no problem.