Installing Windows7 from external HDD

Hello. My burner stopped working for some reason so I am attempting to install Windows7 64 from an old external IDE hard drive 2.5. I still have xp 32 and will install W7 on an empty partition or erase the whole disk.
The problem is I don't know how to make the external drive boot the image. The drive itself is connected via USB. I put the image of W7 OS on the external disk but nothing happens. BIOS recognizes it as a USB device but wont boot. I tried windows7 DVD download tool which has an USB option, but it can't see the disk at all, doesn't recognizes it as a USB drive. Then I tried a small utility named Kon-Bot. It saw it as USB drive and created some sort of boot but when I tried to install the OS the installation screen of windows7 didn't come up.Any ideas?

There's a chip in an external that differentiates it from a flash stick so it won't boot as easily as stick. In fact it's more trouble than its worth. What's simple is to extract the Win7 ISO to the external and run Setup from the XP desktop to overwrite C partition. Everything will end up in a windows.old folder you can delete later. But still back up everything to your external.

That looks like an extreme idea.I mounted the image in virtual drive. It tells me this version can not be launched from this OS, that is XP 32. I forgot to say that when I mounted the OS image in the external HDD and then run through BIOS I got the message NTLR file is missing.I'll try to unpack it now into the external HDD, this time just copy the files and see what happens.Too much of a leg work. I m sure someone has good laugh reading this.

You're welcome.

Extreme? It's simple compared to trying to get an external to boot,.

But it will need to be 32 bit.

And I said extract the files to run Setup, choose to overwrite C.

I know but I need 64. this will not run from inside xp 32 I assume. All I need most likely is a boot code that I can stick in the external, and it will start loading the OS. This or trick external to be seen as a stick, then I can run the lil windows 7 install utility. Shrink it or resize, change the NTFS to FAT or something else? 8 hours and counting and still nothing.

You can try this which is still the top Google search result even though its never been reported here to work: Install Windows 7 From an External Hard Drive | PCWorld

I have enough of this crap. I am getting a usb stick. What kind of stick should I get, pen drive, flash drive, doesn't matter?

4gb flash stick, around $5 with free shipping from buy.com. Since you can store other files on the stick once it's made bootable, you may want to get a larger one for storage or transfer purposes.

Extract the ISO from DVD using ImgBurn, write to stick using UltraISO Software To Create Bootable USB Flash Drive which always works. Leave the 7 Win7 ISO folders in the root of stick when you want to boot it.

Follow these same steps to get a perfect Clean Reinstall - Factory OEM Windows 7