installing/booting XP from a USB HD

[TheRedMunkey]

My girlfriends Laptop HD is busted and it costs a fortune to replace. I know I can install and boot from an external USB drive... I just don't know how. When I try to install onto the external drive, it shows up as a drive i can choose, but when i choose it it tells me I need some kinda of software to install to the USB drive (it gives examples like SCSI). Does anyone know how to do this, or know what software windows is talking about?

Thanks!