as far as im aware
(this was defo true bout 4 years ago) you cannot run windows from a usb device without doing some serious hacking/editing ... so external drive is out
have you tried installing the old software in a virtual machine? or even win7`s XP mode (google it)
imo its much easier to install the new operating system to a
2nd hard disk
within the computer .. before doing anything,clone the win7 using something like active boot disk
"Ability to backup and restore data (Disk Image)"
Active@ Boot Disk - LSoft Technologies
reason for this is it takes minutes to copy this clone back to your pc if needed
(i clone all my operating systems)
this is how i would do it
1) make sure i have all drivers for that operating system .. and they are easy to get at (usb storage dongle/drive)
2) remove the main HD that contains the win7 operating system
3) install the "new" operating system to the 2nd HD
once the new operating system is running well (all the drivers are on and hardware works)
4) plug the 2nd HD back in,boot off it and add the new operating system to the bootmenu of this drive
i use an old copy of "easy BCD" to add operating systems
EasyBCD - NeoSmart Technologies