So if I use MBR for the partition "type", when Ubuntu does all of the individual partitioning later, it won't actually modify the MBR? It will just create the right partitions?
And also, is it required to install a boot loader onto the drive? I assume if you were installing onto drive sdb, you would put the boot loader onto sdb? (As opposed to the partitions sdb1 or sdb2, etc.) Thanks!
I think that your problem is in there somewhere. As I understand it, Ubuntu will install a bootloader (grub) but you have to have an MBR that is set up for booting first, and if it is not, the Ubuntu installer will not notice or fix that (which is kind of silly, but I guess they figure you'll be installing it on your internal drive? I could be wrong about this but I feel like I've encountered this issue when trying to make bootable USBs and so on). You need to do one of the following:
1) Have the disk be bootable and have a bootloader on it, and then boot off it by using the option key at boot time. This does
not require modification of the boot sector of the main disk (your internal drive). So, if the partitions are on sdb, yes, you set up sdb (and not sdb1 or sdb2) to have a bootloader, and then grub has to point to the right partition in it.
2) Have a bootloader on your internal disk that is set up to multi-boot (e.g. with rEFIt), in which case it does not matter what is in the boot sector of the external disk, but you do have to modify your internal disk's boot sector and make sure that the loader you use for Ubuntu looks for Ubuntu on the right disk.
Sometimes, you run into problems where Grub is set up incorrectly and so it's looking for Ubuntu to be on the wrong drive. However, if this happens, then you should, I think, get a black screen with a text mode error message from grub, not the OS X boot menu coming back up. So I think you're not even at that stage yet, and grub isn't even being activated.
I would personally go with option (1), as it's much simpler, and I think the issue is just that the disk is not bootable and so the bootloader never gets activated.