I just got the 500 gb WD Mybook and moved all of my FCE folders and files (including the render, etc folders) and when I opened it I received an error saying my files went offline and I couldn't see any of my clips.

Is there a way to reconnect them? If so, how?

Thanks!

Assuming that FCE is like FCP... Use the "Reconnect Media" command to find the new location of your files on the external drive. Or just quit and start the program again - it should ask you to browse for the files.

You should also set your scratch disk to the external drive or you will end up with files spread between both drives.