- 10.5: Easily change the location of your home directory:

First, copy your home directory to the desired location; for example, to an external hard drive....

Then Control-click on your account's name in the Accounts pane of System Preferences and choose the Advanced Options item that appears. In the new Advanced Options screen, you'll see a field for Home Directory; enter the path to your new home directory here, or click on the Choose button and navigate to the new home directory.