Hmmm, found the area in the Prefs. I guess by default it's set for the lyrics to be embedded into the music files. I selected the "save as an external file.txt" but will that just be for going forward or will the program go through and save all the added lyrics to a text file for safe keeping?
Why do you want to save lyrics as external files when you're concerned about not losing them? You said they're already being saved as a tag in the music file. Transfer the music file and you transfer the tags, including embedded lyrics.
For the Tag Editor - select a file and right-click and open the Tag Editor. Near the top of the window there is the Tag Inspector. Open it and scroll down to see if you see the lyrics. If they're there, they're embedded in the file.
As for changing to save them as external, it would only be from this point forward.
You say you've never been bothered with tags before, but MB is all about the tags. MB is a music manager
first and foremost. It is also a music player, but there are plenty of music players available. In order to use MB to it's fullest, you need to use at least a minimal set of tags (artist, album title, track title, track number, and a few others.)
I suggest you spend some time looking at the Wiki to get a better understanding of MB.