MOD chips

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1 - The only way to tell what type you've got is to open up the case and take a look at the number on the top. You'll then have to find out which component number = which mod chip type.

2 - Always go for the internal - causes less problems.

3 - No, it's no hard, if you have any kind of experience with electronics at all. It involves some soldering, as does pretty much all work inside a console, so if you're not happy doing that, then take it along to pretty much any independent games shop and they'll install it for you at a pretty low cost if they're nice.

There are diagrams of which pins should be connected to which terminals available at quite a few sites. I can't remember any url's off the top of my head, but you should be able to find one using any major search engine.