|If you are talking about doing a system state backup then yes but you have to do the backup from the command line.|
WBADMIN START SYSTEMSTATEBACKUP -backuptarget:F:
(or what ever drive your removable is on)
I think the old NTBACKUP was way better than this 2008 junk but that is MS for you.
To restore it you just boot from the system disk and restore from backup.
Now, if you want to actually run from an external hard drive (which is CRAZY) you will need to install to it using a new install. Be aware it will only work on servers with the exact same hardware so don't think you can take the hard drive off of the server and move it to another. I have never tried it my self, my guess is windows will detect that it is removable media and stop the install.
The only other way would be to do like suggested above which is install to a Linux boot and with a VM which runs the image. It will be really slow.