MacBook with circle at startup; laptop has broken cd drive :(

I bought a white macbook back in 2008 or 2009, I'm not sure what OS system it's running on, but I'm pretty sure it's OS. When I turn the computer on, the screen is grey, and the apple with the circle below it appears. For months I haven't invested into looking at why it is doing that (I bought a Pro so it's been at the back of my mind).
Now I'm trying to fix it without having to take it in.
I have a iomega hard drive and I tried using that to boot up the computer but I'm not sure how to go about that... I have the operating system on the hard drive and i pressed "C" when starting up the computer but no go.
The farthest I've gone is to get the giant hard drive icon to appear but when I click it it just returns to the circle.
Also, my cd drive or whatever it's called is broken so i cant put any disks in.
Fixing it would be more than just investing in another computer, so im hoping the external hard drive can save the day somehow. :/
Any help would be the best! Thankyouuuu.

SaraMarie, welcome to Apple Discussions.
You posted in the Older PowerBooks forum which is for PBs prior to year 2000. A more appropriate forum for MacBooks is at http://discussions.apple.com/category.jspa?categoryID=218
See Mac OS X: "Broken folder" icon, prohibitory sign, or kernel panic when computer starts
http://docs.info.apple.com/article.html?artnum=106805
Depressing the C key at startup instructs the Mac to startup from the disc drive CD or DVD. For all startup drive options (internal HD, external HD, disc drive), depress the Option key at startup.
 Cheers, Tom

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