Somewhat complicated topic. You cannot install XP onto a USB drive.
XP is designed to prevent installation to a drive marked as "Removable".
However, some folks have reportedly had success in taking a full XP
instance and imaging/cloning that to a USB drive and have that unit be
bootable. Contrary to the "Rated Specifications" of USB-2 having a
throughput of 480 Megabytes, in real-world situations it is more like a
sustained rate of around 25 Megabytes. Even if you could get a USB
drive to become a bootable media, the performance would not be good.
It's probably more effective to have a USB drive hold an Image or a
backup, than use it to actually boot the PC.

"TomT" <tomt@adslweb.co.uk> wrote in message
news:%23FlV1XUDGHA.1676@TK2MSFTNGP09.phx.gbl...
> I've installed XP Pro (64-bit but it should work the same) onto a 40GB IDE
> Hard Disk and it's working well.
>
> I have a spare USB IDE Hard Disk bay, If I put the hard disk into that
> would I be able to boot XP from it ?
>
> My PC supports booting from USB Devices, I just don't want to corrupt the
> XP installation !!
>
> Any ideas / advice
>
> Thanks
>
> Tomt