May we ask why you want to? We may be able to offer a solution that doesn't require doing an installation to an external driver.
christop is not quite correct. If the external drive is eSATA, you could install Win7 to it. Win7 just doesn't want to install to USB devices. I can think of a couple of ways to get Win7 to boot from a USB device, but I wouldn't want to. Although USB 3.0 is pretty much fast enough.
I have samsung NC10 and the hard drive crushed so i bought a new hard drive and it seems all ok except i want to put it original win xp. The external cd drive it not coming up on the computer and operating system not found is the only massage i am getting. I thought if i can install everything on the hard drive and put it back into the notebook, i should be able to use it. Please help