Using an external drive for OS, problems with install

Hi
My iMac, 1.8 GHz, OS 10.5.8, PPC's internal hard drive is failing.  Rather than replace the internal drive, I had hoped to use an external USB drive to run the OS.
When using the OS 10.5.x install, I am repeatedly told the OS cannot be installed onto my external drive.
I cannot narrow down the isse.
Is it because it is a USB drive?
Is it the format of the drive?  It is currently formatted as "Mac OS X Extended Journaled."
Is it indicative of some other problem with the computer?

You need an external Firewire drive to boot a PowerPC Mac computer.
I recommend you do a google search on any external harddrive you are looking at.
I bought a low cost external drive enclosure. When I started having trouble with it, I did a google search and found a lot of complaints about the drive enclosure. I ended up buying a new drive enclosure. On my second go around, I decided to buy a drive enclosure with a good history of working with Macs. The chip set seems to be the key ingredient. The Oxford line of chips seems to be good. I got the Oxford 911.
Has everything interface:
FireWire 800/400 + USB2, + eSATA 'Quad Interface'
save a little money interface:
FireWire 400 + USB 2.0
This web page lists both external harddrive types. You may need to scroll to the right to see both.
http://eshop.macsales.com/shop/firewire/1394/USB/EliteAL/eSATA_FW800_FW400_USB
The latest the hard drive enclosures support the newer serial ata drives. The drive and closure that I list supports only older parallel ata.
Here is an external hd enclosure.
http://eshop.macsales.com/item/Other%20World%20Computing/MEFW91UAL1K/
Here is what one contributor recommended:
http://discussions.apple.com/message.jspa?messageID=10452917#10452917
Folks in these Mac forums recommend LaCie, OWC or G-Tech.
Here is a list of recommended drives:
http://discussions.apple.com/thread.jspa?messageID=5564509#5564509

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