David:
If I understand your question correctly, you're raising two issues...
1. Can you directly install XP on your USB external hard drive? (I assume
you're referring to a USB external hard drive and not a jump (flash, pen)
drive.), and,
2. Will that USB external hard drive be bootable?
Based on my own experience as well as other users with whom I've been in
contact, the answer is "no" to both questions.
I have never been able to install XP directly onto a USB EHD. I've tried to
do so using a variety of USB EXHs but have never been able to do so. In my
experience, XP will not recognize the EXH for the purpose of installing the
OS. I must admit that a number of users have told me that they (or someone
they knew) could achieve this, but I've never been able to verify this.
Now I am able to "clone" the contents of an internal hard drive (containing
the XP OS) to the USB EHD using a disk imaging program such as Symantec's
Norton Ghost 2003 program. I do this routinely. However, I've never been
able to boot the USB EHD. I can clone the contents of the EHD back to the
internal HD (which will be bootable) should the need arise, but the
capability of booting from the USB EXH has eluded me. I'm sure you will
receive responses to the effect that the USB EXH is bootable as long as the
motherboard's BIOS supports this capability. All I can say is that I have
worked with a fairly large variety of modern motherboards presumably having
this capability but I've yet to boot from a USB EXH.
Art