Cannot partition external drive?

Hello. I have a MacBook with a 120 gb internal drive but it is too small for me so i took it out. I have decided to use my 500 gb usb drive as my primary drive. I tried to use bootcamp and i get the message "You cannot partition an external disk drive. Restart your computer using your computer's internal startup disk." Is this true or is there something i can do about this? It would be nice to have 250gb for OSX and 250gb for Windows 7. Any help is much appreciated!