Installing Windows 7 with an external hard drive

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Is it possible to use my USB FreeAgentGo external hard drive to install windows onto my computer?

I haven't got access to a DVD drive unfortunately. Is it possible? My GoogleFu is rubbish it seems.
 
Easy!
If you are using it for other stuff as well just do a partition especially for windows 7 installation. Mark the partition as active and off you go. Copy all of the windows 7 files to the active partition and you are done.
Boot up and select your external drive and off you go and it is a lot faster as well!
 
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