Originally Posted by kiwiasian
Or else people could install Windows 7 onto external HDDs and then could just transport that anywhere and boot from USB.
By that logic, you could also install on an "internal" hard drive, then swap it to a different computer. Which wouldn't work because Windows would attempt to authenticate based on hardware present (motherboard), which wouldn't work (unless it's literally identical hardware). There must be a more legit reason--like performance or something? Otherwise, there's no harm in using a dedicated "external" hard drive as your OS drive. Though I don't see why you'd want to.
In asking "really," I was implying that I was looking for a source--I couldn't find one at first, but now I've come across this: http://www.intowindows.com/how-to-in...ive-must-read/
Which confirms that you can't technically install to an external drive, but also outlines a workaround.
Back to the installation onto an external drive, there must be a deeper reason than, "you could just install it and take it to any computer."