Yep, no problem. I did exactly the same thing; since I was upgrading from Tiger to Leopard I bought a new drive and an enclosure like that one, installed the new disk, put the old drive into the enclosure, installed Leopard nice and clean, then hooked up the external. Copied all my files over to the internal drive and kept the OS on the external for awhile until it was clear that I was good with Leopard and wouldn't need to swap the drive back for any reason.
Eventually deleted Tiger and now have a nice external drive for stuff I don't need to take with me.
Would have done something similar with the Snow Leopard upgrade, but decided that since SL frees up space and I would need to buy some other stuff to support this (parallels requires an update to 4.0, so had to shell out $$s for that, plus I treated myself to a new external bluetooth keyboard while I was at the store) I opted for upgrade in place.