|You can boot from an external hard drive in some circumstances but you CANNOT load an existing installation of 2000 or XP from an external hard drive - all you get is a blue screen and "unmountable_boot_volume". That is due to Microsoft not wanting you to be able to boot 2000 or XP from an external drive.|
The same probably applies to Vista and Windows 7.
There is no workaround as far as I know.
However, you could easily install a larger capacity hard drive in the laptop.
There are free drive preparation programs available from one of the brands of hard drive you have attached to your computer's web sites that can copy the entire contents of a physical drive to a larger drive, and you can have the larger drive have larger partitions to suit while you're doing that, then you swap drives.
Your other possible problem is a laptop often can't actually supply 500ma from each of it's built in USB ports when more than one USB device is plugged in. External hard drives require 500ma from a USB port per drive. One may be able to get the 500ma it needs, two may not be able to.
External USB hubs that are powered - have their own 5v D.C. power adapter - often DO NOT solve the problem.
If your laptop has a PCMCIA slot or an ExpressCard slot, you can add a USB 2.0 (or USB 3.0 ?) multiple USB port controller card, but all the ones I've examined the specs for so far support a 500ma total current draw for all the ports, not 500ma per port, unless the card has a jack that you can plug an external 5v D. C. power adapter into and you use that adapter - the card usually if not always doesn't come with that power adapter.