Ok I think I understand why my Ubuntu 10.10 freezes when pluggin in an external hard drive through USB.
First of all I have to mention that my Ubuntu is installed on another 160gb external hard drive. During the installation it was mounted as /dev/sdc
/dev/sda = primary laptop hard disk with windows 7 /dev/sdb = 4gb usb flash drive used to install ubuntu 10.10 /dev/sdc = my external hard drive where ubuntu had been installed
After performing a System Update and restarting computer, I've received an error message that ubuntu is unable to mount: /boot, /, /home, /windows partitions.
I immediately googled the problem and seems I wasn't the only one with this issue. I've solved the problem by editing /etc/fstab (I don't remembered the exact filename) during the startup console before ubuntu is loaded. I have changed long UUID strings to /dev/sdb/ for all 5 of my partitions. The reason for /dev/sdb is because that was the actual mount showing by typing sudo blkud (again, please edit this post if I have mispelled some commands, as I don't remember exactly what was it called; it shows you the current mount points for every partition that is connected to the computer).
Now whenever I connect my backup external hard drive while ubuntu is loaded, the system just freezes. If I connect it before ubuntu loads, it gives me that same error message I firs received after doing System Update, because now this backup hard drive is pointing to /dev/sdb and my ubuntu external hard drive is pointing to /dev/sdc, while my /etc/fstab file still says that my ubuntu partitions are on /dev/sdb.
So is there any workaround to that? What should I do?

sudo blkid,sudo fdisk -l,cat /etc/fstab– nitstorm Oct 3 '11 at 2:19