Is there any advantage/disadvantage to installing a dust collector outside the shop?
It may sound as resolute as a long-range weather forecast, but yes, maybe and no. It is really a personal choice. Locating the dust collection machine outside the shop will lower sound levels and free up shop space. For some woodworkers (me included) these are the deciding advantages. But if your winters are cold, first consider how to minimize the loss of heated air, possibly through a filtered passive air return. The dust collection bucket needs to be checked frequently and emptied when full, so think carefully about logistics before locating a dust collector outside the shop proper. Be sure to plan for a way to turn the unit on and off remotely. And of course distance increases the length of ductwork, therefore airflow (CFM) may be lessened – so take that into account when sizing the unit.
What size machine should I buy?
My flippant answer is “the biggest you can,” but the better answer is to carefully analyze your shop needs and size the machine accordingly.