Can I install windows on an external drive?

can I install windows on an external drive and have the choice boot from it when I need to do something windows specific, by selecting it as a start up disk? I don't want it on my machine at all times, but there is a time I'd need it and I don't want it to take up space on my internal hd.
if it's possible how is it done? I have a windows vista disk, and an external HD ready to go.
Thanks.

In short, no. MS has restricted the installation of its Windows operating systems to internal hard drives only.

Running it on Boot Camp, you aren't looking at taking up much HD space anyway.

See here for different Windows OSs
Boot Camp: System requirements for Microsoft Windows