"The FIRMWARE upgrade is what allows Windows to run the Mac, not Boot Camp. Bootcamp is just a simple interface that guides you.
Once you install the firmware upgrade which allows for BIOS, then boot from the Windows CD (hold C during startup) and follow the regular Windows setup procedure while selecting your external drive partition to install Windows on to.
After installation, according to http://docs.info.apple.com/article.html?artnum=75459 "Press Option-Command-Shift-Delete during startup to Bypass primary startup volume and seek a different startup volume (such as a CD or external disk)". At this point, you'll be able to select your external drive to boot from. Since Windows will be installed there, you'll boot Windows.
Note: I would use Boot Camp to create the driver CD which will allow Windows to support your Mac's hardware properly. "
Ive been interested in this topic and read about 5 pages into it - none have succeeded fully yet - at least not with a FireWire External enclosure, USB HDD however works but without pagefiles support...
Edit:
If you've got a firewire HDD, best thing to do is bootcamp it to a 5GB(?) partition then store all windows files on your external HDD, that way you can still boot into XP but the main bulk is in the external.
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