With Windows XP, it was not possible to install it to a USB Hard drive (without diving deep into unsupported terrain). With Windows 7, it looks like VHD Support could solve that.
But is there a supported way to install either Windows Vista or Windows 2008 Server on a USB Hard drive?
Best Answer
It's not possible, from what I know, to install Vista nor 2008 on some USB drive. The best way to use Vista without disturbing your current system would probably be to use a vistualisation tool like VMware or others.