Use a portable Hard Drive as a Desktop HD?

I'm thinking of ways to cut costs and get a desktop. However, I want a SSD and Hard Drive.

I really want a desktop with a SSD. If I buy one I will still need another proper
high volume hard drive. So I was thinking...can I use my Seagate Go Flex 500GB
as a hard drive? What issues are there? I'm assuming speed will be impacted.
Any comments?