I'd recommend external, but I've always liked it that way, however some people have space issues and those extra few inches they don't have behind the tank, plus for an external one you need to cut into the side of the tank (and I wouldn't recommend just a hole.
It's fairly simple, decide how big you want it, cut the pieces to fit a 3/4 box (you don't need one side and a top of the box). Make you box using weldon 3 or 4 if the pieces are cut nicely, if you don't have the ability to do that, then weldon 16 is a nice beginners one.
Once you have your box and its had some time to firm up you can put it on the tank (whether inside or outside). If the tank is still full that's to say you have to install it with the tank upright you need to use 16 with some clamps to get it to hold, if its empty, you might be able to use 3 or 4, but you have to be careful some acrylic tanks have a tendency to bow out over time so the side isn't flat as you'd hope.