External HardDrive OS?

Hey all.

Im considering buying a new Harddrive soon to get a little bit extra space and the fact that my HDD in my comp is about 8 years old and 20gigs.

Im considering purchasing an external HDD and was wondering am I able to install an operating system on that and have it boot up as the defualt OS on my comp? or are external HDD’s just for storage? I would install Win XP on it.

Ben =)