Win 7 on Dell Mini 9 with an external HDD?

My Dell Mini 9 is running Windows XP Home SP3. I would like to upgrade it using an external HDD, my 8GB SSD could not handle it. (Insane though)
Is there some way to install it and boot from external HDD?
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  1. I'm surprised it runs XP with only an 8GB SSD.... I thought the minimum system requirements for XP were 10GB of free hard drive space.

    You're better off upgrading that drive than using an external hard drive.
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