User's Guide - Key Concepts
External files are files that your AutoPlay application accesses as external references. They aren't built into the application like internal files. Instead, they're simply expected to be where you say they will be at run time.
There are basically two kinds of external files: those that you need to distribute with your application, and those that the users should already have on their systems (or will be able to download).
Any external files that you need to distribute should be moved or copied to your project's Distribution folder before you add them to your project. In fact, AutoPlay Media Studio can only browse for external files that are in your Distribution folder (or in a subfolder below it).
If you know that the users will already have a file on their systems, you can just type in the path where the file will be. If you're not sure where the file will be, you might need to use a "File - Search" action to locate the file, store the path to the file in a variable, and then type in that variable as the path instead.
Next: Internal References