not necessarily - i would recommend using a decent external hard drive connected via firewire as a scratch disk. if you're only accessing small amounts of video at a time, though, usb 2 should be ok. definitely dont use usb1.x though... far too slow!
Depends on quality (bitrate) of video, as you can stream video smoothly over the internet (a much slower connection) but it's rubbish.
Consider a removable hard drive caddy (http://tinyurl.com/5fotr), with XP you can just drop disks in and out and it fits into a 5.25" rack (same space as a CDROM drive)
Access speed will own you as well.