you can sometimes install straight from the mounted iso, but it doesn't always work / work the way the you want it to. The main reason I installed using the method I listed was to create a recovery partition in the process. Makes life much easier if your OS gets screwed up. You can follow the same method to install from an external drive, just mark the external drive partition as active first and change the boot order in the bios to boot the external drive before the internal HDD.
edit: fixed some confusing language