I keep my main library on usb disk and I'd like a smaller library on my laptop, can I get itunes to ask me which library to load or get it to load the smaller one if the larger one on usb disk is not present.
Hold OPTION as you open iTunes to select your library. If the external isn't plugged in then iTunes will generally default back to the internal drive's library.
Sure you can. They'll just be treated as completely separate libraries. I'm pretty sure that'll use up two 'machines' on your iTunes account, but could be wrong...
Create the new library by holding OPTION at startup and then literally drag the song files from wherever you keep them to iTunes. They should be imported from there.