but it will probably take alot of work. I can see a dual boot.
Part of the problem that I see is the fact that the usb drivers are not typically loaded at the time of setup. You have to add usb support in after the kernel is installed.
Go to: http://www.linux-usb.org/
There are some mailing lists you can try posting to. I looked on RH's site and there was someone else trying to do the same. But no one responded back.
I've personally have never installed it on an external usb device, or have seen or heard it done.
And I have never seen this done on a M$ box. That's not to say that it can't be done or has not been done.
But even on the linux-usb guide pages:
http://www.linux-usb.org/USB-guide/book1.html
There is no reference to anything like that. So I have my doubts. But I would post to one of the mailing lists there.
One of the other problems that I see is that your system (motherboard) has to be able to boot off of USB. If it's not a boot option then your research is all a moot point.