When should I use Inline vs. External Javascript?

Maintainability is definitely a reason to keep them external, but if the configuration is a one-liner (or in general shorter than the HTTP overhead you would get for making those files external) it's performance-wise better to keep them inline. Always remember, that each HTTP request generates some overhead in terms of execution time and traffic.

Naturally this all becomes irrelevant the moment your code is longer than a couple of lines and is not really specific to one single page. The moment you want to be able to reuse that code, make it external. If you don't, look at its size and decide then.

At the time this answer was originally posted (2008), the rule was simple: All script should be external. Both for maintenance and performance.

(Why performance? Because if the code is separate, it can easier be cached by browsers.)

JavaScript doesn't belong in the HTML code and if it contains special characters (such as <, >) it even creates problems.

Nowadays, web scalability has changed. Reducing the number of requests has become a valid consideration due to the latency of making multiple HTTP requests. This makes the answer more complex: in most cases, having JavaScript external is still recommended. But for certain cases, especially very small pieces of code, inlining them into the site’s HTML makes sense.