After seeing an external flash in action and reading up a little, I want to list down things that I learned about external flashes.
One of the most intersting thing I learned about external flashes is that they can be fired remotely via different ways -
Optical slave - the external flash will detect when your pop-up flash fires and it will fire based on that. This has two options - 1) normal, which fires anytime any other flash is fired. This mode is used with older flash systems that do not have pre-flash; and 2) you can set the external flash to ignore the pre-flash, this mode is to be used with newer flash systems that utilize pre-flash.
Transmitter - some external flashes can be fired using wireless transmitters. Most mid-range and high-end flashes are capable of this. A specific transmitter (most of the time sold separately) is used to trigger the flash. Some mid-range and high-end DSLRs have built-in wireless flash transmitters.
Slave to another flash - high-end flashes can act as also act as triggers to other high end or mid-range external flashes. The "commander" flash sends out the signals to the "slave" flash on when to fire and how much power to use.
Via hot shoe - you connect a transmitter to your camera's hot shoe mount and that transmitter is connected via a wire to your external flash.
PC sync - the flash is connected to a PC via a wire that is also connected to the camera and (sometimes) other external flashes.
Note: these possibilites and features are not present on all external flashes.