I understand that you are trying to do two things: move all of your photos to an external drive, and split your library into libraries by year. I also have my libraries split up; it makes backing up faster (if I only modify one library) and makes loading faster too.
First, you do have to familiarize yourself with managing multiple libraries. The Apple-recommended way works, but is slightly more tedious for me than to use iPhotoBuddy (donation ware -
http://www.iphotobuddy.com/) which has a really nice elegant interface, and works well in Tiger and Leopard. You 'add' libraries to a list by browsing for them anywhere in your filesystem, then click on the one you want to open. iPhotobuddy then launches iPhoto and quits. You never end up launching iPhoto directly again, but if you do, it just opens the last library you used. (You can still use the option-key method if you want). I recommend iPhotobuddy highly.
The only way to split libraries I know of is to start by copying your existing all-inclusive library to the external location, retaining a copy in your home folder for now as a backup. Then, make another copy of the library, and rename it '2003' for example. Open '2003' in iPhoto, and delete all photos that are not dated in 2003. Remember to empty the iPhoto trash (inside iPhoto ... not the finder trash) or you'll still use all that disk space. Close the library, which quits iPhoto. Repeat this process for all other years, by copying the original huge library to a renamed file, and editing that file to retain only what you want. Once you have done that for all years, you can simply keep the original 'everything' library as a backup, and delete the version in your home folder to restore disk space there.
That is how I manage my multiple libraries. The biggest complicating factor in doing so for me, is that making compilations across the years is harder, because you have to do tagging with keywords for each library separately, etc. But overall, it is worth it. Now, whenever I take a lot of pictures at an event, I usually just make a separate library for that event (you can make a blank library using Apple's method) and then export the best pictures into a folder for subsequent import into '2008', for example, once you've done the requisite culling. For smaller shoots, importing directly into '2008' is the way to go.
Hope this helps.
