Looks like there are a number of considerations when using an external USB device - it is not as simple as first thought:

If using USB stick: - start playback of current song takes 2 minutes and loading of full song-list takes 5 minutes
If using USB disk: - start playback of current song takes 10sec? and loading of full song-list several minutes

It is possible to search the directory structure once initial playback has started, but fully indexed artist/albums/songs on iDrive takes longer.

Once other consideration I've noticed is that voice command/music search doesn't appear to work for the external drives.