Become a MacRumors Supporter for $50/year with no ads, ability to filter front page stories, and private forums.
No can do. This is more a limitation of Windows than anything else. Windows does not support booting from firewire or USB due to how they load their drivers.
 
Is this possible?

I've got a spare external hard drive and would be great if I could put Windows 7 on it.
While you can't boot from an external HD.

However, you could use VMware Fusion or Parallels to run via virtualization which might serve your needs.
 
Register on MacRumors! This sidebar will go away, and you'll see fewer ads.