Can I install XP in a (partitioned) external drive and run it on my Macbook

I just bought a Macbook (late '08), but for work I need to use Windows XP. I have a 500 MB external drive, too.
Could I partition my external drive, install XP there and run it on my Macbook from there?
How would the external drive be affected as far as storing content from both OS's?
Thanks.

Hi Sergio,
Thanks. What if I partitioned my macbook's hard drive (I see everybody is talking of boot camp, but I haven't looked it up yet), say 70% mac and 30% xp, then I could run xp no problem, right?
Yes, that should work out. XP itself needs about 10GB of HD space to run perfectly and add to that the amount of space you need for your Windows applications.
BootCamp is part of OSX Leopard, see here: http://www.apple.com/support/bootcamp/
And could I save my content from both OS in the ext drive without distinction and be able to fish it out, or should I partition my drive too?
If 'save' = backup, then you can use WinClone http://twocanoes.com/winclone/ to make an image file of your Windows partition and for OSX backup you can use TimeMachine (part of OSX) or SuperDuper or Carbon Copy Cloner which can make a bootable backup of your OSX partition onto your external HD.
http://www.shirt-pocket.com/SuperDuper/SuperDuperDescription.html
http://www.bombich.com/software/ccc.html
If you simply want to save your files onto your external HD and have no single files that are bigger than 4GB you can make one partition on your external HD nd use the FAT32 file system (called MS-DOS in OSX Disk Utility).
Regards
Stefan

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