It is plug and play. Plug the hard drive into the case, plug the case into the computer. Sure, it adds another step, but from what I've found you can save nearly $100 US in some situations if you get a case and HDD separately.
I found a 250gig Seagate hard drive at NewEgg for $112 US (there were cheaper options, but Seagate makes great drives and you can't beat the 5 year warranty.) Link is
here. Keep in mind that you can go lower on your space if you want to knock a few bucks off the price
Than there's the MacAlly Aluminum enclosure for $35.99 US. Link is
here.
That brings your grand total to $147.99 US, which I'm sure easily bests any price to space ratio that you've found on pre-assmebled external drives. I'm certainly not saying you have to go this way, but for the price conscious consumer, it really can't be beat.