How do I Install OSX to an External Drive Partition?

I have an external FW800 drive that I've made two partitions on. One partition I want to install OSX to, for external booting; the other partition is just for storage. I'm trying to use the SNL install disk but It's not installing, it just stalls out. I must be doing something wrong.
Thanks,
John

Is the external drive prepped correctly?
Drive Preparation
1.  Open Disk Utility in your Utilities folder.
2. After DU loads select your hard drive (this is the entry with the mfgr.'s ID and size) from the left side list. Click on the Partition tab in the DU main window.
3. Under the Volume Scheme heading set the number of partitions from the drop down menu to one. Set the format type to Mac OS Extended (Journaled.) Click on the Options button, set the partition scheme to GUID then click on the OK button. Click on the Partition button and wait until the process has completed.
4. Select the volume you just created (this is the sub-entry under the drive entry) from the left side list. Click on the Erase tab in the DU main window.
5. Set the format type to Mac OS Extended (Journaled.) Click on the Options button, check the button for Zero Data and click on OK to return to the Erase window.
6. Click on the Erase button. The format process can take up to several hours depending upon the drive size.
Steps 4-6 are optional but should be used on a drive that has never been formatted before, if the format type is not Mac OS Extended, if the partition scheme has been changed, or if a different operating system (not OS X) has been installed on the drive.
When formatting has completed quit DU and return to the installer.  Complete the OS X installation.
Or you can clone your current system to the partition:
Clone using Restore Option of Disk Utility
Open Disk Utility from the Utilities folder.
Select the destination volume from the left side list.
Click on the Restore tab in the DU main window.
Check the box labeled Erase destination.
Select the destination volume from the left side list and drag it to the Destination entry field.
Select the source volume from the left side list and drag it to the Source entry field.
Double-check you got it right, then click on the Restore button.
Destination means the external drive. Source means the internal startup drive.

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