Would using an external hard drive (Normal, non-SSD, 5400RPM) as a scratch disk in Adobe Illustrator help with the performance/speed of rendering? When I work with large canvases, Illustrator starts to become sluggish. Even though I have 4GB of RAM, this still happens.
Scratch disk & memory will not help you with rendering UNLESS the hard drive is being used to swap out data to free up memory, but that is still not strictly a rendering problem.
If you are having issues because the computer is using up all your RAM and disk swap space and therefore thrashing the hard drive, you should buy more RAM: 4GB is cheaper than an external hard drive.
It might, especially if it's USB2 or firewire. You'll need to make sure you have a decent transfer speed for it to help. Of course, anything is better than nothing. :-)
So I'd give it a try.
When you talk about "large canvases", how large are you talking about? I've worked A2 with no problems (MacBook Pro w/ 4G RAM) but have run into problems on smaller projects if there's a lot of vector information or a lot of memory-dependent effects (big drop shadows or 3D effects are good examples of this).
If you are using lots of big raster images you might consider switching to pixel preview mode (View -> Pixel Preview); this doesn't display your images at their final resolution but it makes moving through Illustrator a lot easier.