I have windows xp home edition, i am going to get a new computer within the next month when i get enough income but untill then i would like to jumpstart my buisness get a few programs ready, get myeself prepared and organized, programs ill use is stuff like, usps, excel, java scripting and a bunch of other programs, that im going to need but i would like to use the mass storage that my 500 gb external hardrive can use not my 4 gb ide hardrive

That's good.

You also have the option of using Portable Apps but it wont apply to each software that you want to use.

You also have the option of using virtualization softwares like MVPC or VMware but they eat huge resources.

The best option that I suggest (and I also use it personally) is using Mojopac.
Check the video on the site http://www.mojopac.com/
Check the requirements on the download page and give it a try.

Only one thing I didn't like about the free edition is that you cannot work on files shared anywhere else on the drive (except in the same folder tree) and not even on your desktop fixed drives.

Try it and I'm sure you would love it.

Post your comments after using it

MEGA MEGA MEGA BYTE LOL,.. ii know i was realy tired yesterday lol

Really thanks guys...Me too have an external one and now trying some portable apps...And they are working fine..but not all advantages I am getting but still 'am trying..

Yes it can be done and it is easy:
1.) Make sure you have at least 40GB HDD with no partition.
2.) Required OS is to be installed on it.
3.) Reboot your PC and enter the boot menu and choose to boot from the external drive.
4.) Make sure there is no previous windows on your PC, if it is already:
- First, install the windows on HDD and re run the windows installation and format your PC
- Note/Caution = Donot reinstall the windows on your PC's HDD.
4.) Then your PC will be booted from your HDD and there you go, you are done with an external OS.