Your bios has to display the external drive when plugged as a boot option in order to see that work however. Since that applies to usb flash drives as well if you can boot from a flash drive you should also see the external hard drive in the boot device menu as well.
The flash drive method however is quite a bit more reliable since those are designed to be bootable devoces by way of usb while hard drives in an external casing are intended for storage application there. With large flash drives coming down in prices that would seem to be the best out of two there.
W7 Ultimate x64/W10 Pro x64/W11 Pro Triple Boot - Main PC W7 Remote PC Micro ATX W7 Pro x64/W11 Pro
CPU
AMD Phenom II X4 975 Deneb 3.6ghz - 965 2nd remote pc
Motherboard
Gigabyte GA-790XTA-UD4-Gigabyte GA-880GM-D2H remote pc
Memory
Kingston Hyper X DDR3 1600 1.5v 16gb - Hyper X Fury 8gb 2nd
Graphics Card(s)
MSI HD Radeon 5750 1gb - MSI HD Radeon 6450 on mini tower
Sound Card
Creative Labs X-Fi Xtreme Audio P - Realtek onooard 2nd case
Monitor(s) Displays
ASUS VW199T-P 19" HP 2082a Main-HP 2082a 20" remote pc
Screen Resolution
Asus 1440x900 - HP 1600x900
Hard Drives
WD Black 1TB HD per OS W7, W10, and pending W11 presently on 500gb OS Drive - Pending Triple 1TB HDs for Spanned Storage/backup volume
Single 2TB external USB enclosure, single 1TB System 7 Host/Boot drive, Pending 8TB external HD for system image b
PSU
Corsair 750TX - primary / Corsair CX600 - second
Case
Antec 900-2 - SSD compatible / NZXT Vulcan mini tower
Another thing you can do is install slysoft virtual clone drive and mount the image. You dont need to format your computer everytime you install an OS. You can still do a clean install, it copies all the files to a temp spot before the install and then will install a fresh copy of Windows. this will prevent you from needing to burn the disk which is what I assume you really want to do and you are not dead set on just wanting to install off an external hard drive?
Some here will simply burn the iso onto a dvd-rw rather then toss each disk once the next one comes along. The usb key option was found here to be a far more reliable method since installs from rws can end up seeing too many problems.
I can imagine you would likely run into similar ones using the external hard drive rhrough the usb bus. The usb key method however sees a nice clean install every time using that option. But if you lack one of those and want to try out something new how about not using any external drive or device? http://www.sevenforums.com/tutorials/10280-install-windows-7-without-using-any-external-device.html
W7 Ultimate x64/W10 Pro x64/W11 Pro Triple Boot - Main PC W7 Remote PC Micro ATX W7 Pro x64/W11 Pro
CPU
AMD Phenom II X4 975 Deneb 3.6ghz - 965 2nd remote pc
Motherboard
Gigabyte GA-790XTA-UD4-Gigabyte GA-880GM-D2H remote pc
Memory
Kingston Hyper X DDR3 1600 1.5v 16gb - Hyper X Fury 8gb 2nd
Graphics Card(s)
MSI HD Radeon 5750 1gb - MSI HD Radeon 6450 on mini tower
Sound Card
Creative Labs X-Fi Xtreme Audio P - Realtek onooard 2nd case
Monitor(s) Displays
ASUS VW199T-P 19" HP 2082a Main-HP 2082a 20" remote pc
Screen Resolution
Asus 1440x900 - HP 1600x900
Hard Drives
WD Black 1TB HD per OS W7, W10, and pending W11 presently on 500gb OS Drive - Pending Triple 1TB HDs for Spanned Storage/backup volume
Single 2TB external USB enclosure, single 1TB System 7 Host/Boot drive, Pending 8TB external HD for system image b
PSU
Corsair 750TX - primary / Corsair CX600 - second
Case
Antec 900-2 - SSD compatible / NZXT Vulcan mini tower
@Home: 4 disks that results in ~4.3 TB. of usable space.
@Work: Western Digital WD10EARS (1 TB.)
PSU
@Home: Topower 650W / @Work: Shark Net 600W
Case
@Home: Euro Case Generic / @Work: Banghó Extrema
Keyboard
@Home: Genius (Spa) / @Work: Noga Net (Spa)
Mouse
@Home: HP Laser 2.4G Xa965 / @Work: Genius Optical generic
Internet Speed
@Home/Work: Fibertel 7Mbps/512kbps
Antivirus
@Home/Work: Windows Defender+Spybot 2+AdwCleaner
Browser
@Home/Work: Google Chrome (Dev)+Mozilla Firefox (Aurora)
Other Info
@Home:
Microsoft Xbox 360 wireless gamepad+USB receiver.
Microsoft Xbox 360 wired gamepad.
Logitech C910 Full HD webcam.
Generic 5.1 analog Home Theater.
I usually take a "external HD" and several attachments with which to
reinstall or install or repair. The external HD with "uncompressed iso", will function in almost any manner you want. There are also several EXCELLENT programs with which you can CLONE the NEW HD external or Internal. Long time ago, at Computer Shows - many venders had NEW computers for sale, also you could ask for custom devices. Once the system was to your approval, If you want an OS installed with Legit KEY, say OEM or Retail version. ASK, I used MAXTOR CLONE my self to install a clean CLONED OS to the new internal HD via external HD. then would give the customer a Verified Sticker which he could if he chose apply to the outside of his case, just like Retail Stores do today.
As far back as Windows 3.1 currently up to today... it is possible.
