Sorry to necro this thread, it just I still need an answer and I spent alot of time googling and searching on this forum. So far, despite following the directions, when I try to boot from the external hard drive, it just hangs there and the screen never opens (unless I need to really wait a really long time).
It seems the missing detail is likely that I have to make the hard drive bootable.
However, so far, all the guides that talks about making them bootable requires to clean the drive (well flash, but I guess hard drives requires that too). That defeats one of the biggest selling points in this guide, no need to delete any files (also to note, I seperated the hard drive into two partitions as directed, the cmd only see them as one). So how does one make it bootable without clearing all the files.
Update: How to make your external HD bootable
It seems that it should work now, I don't understand what is my problem. When I try to boot from USB, it just hangs there and the Windows 7 setup never appears.