An external SD/FF is analogue, which modifies the signal that comes out the back of an Amiga.
An internal SD/FF is digital, in that it clips directly onto the graphics chips. It produces it's own VGA output signal down it's own cable and connector, completely bypassing that on the back of an Amiga.
So yes, an external SD/FF produces inferior results. I've even heard of external SD/FF's having to 'warm up' before they produce a picture! They are also plagued with overheating problems and 'rolling' pictures.
Everyone should get an internal SD/FF if you can!
Steve.