|"Probably will not work on an external usb hard drive."|
You cannot load Windows from a regular Windows 2000 and up operating system installation when it's on an external drive, due to Microsoft's wishes.
You get a blue screen error and that's it.
When Windows 7 has already been installed, you are better off running XP as a virtual machine, from Windows 7.
A good one to use is Microsoft's free Virtual PC:
Setting up a dual boot configuration is more complicated.
It you mean you have a Rocket 100 PCI EIDE hard drive controller card, it's not Rocket 100, it's Rocket100.
The 100 = it's max burst data transfer speed is 100 mb/sec.
That's fine if the IDE drive you connect to it has a max burst data transfer speed of no more than 100 mb/sec, but if it has a 133 mb/sec max burst data transfer speed it would be limited to 100 mb/sec max.
Newer drive controller chipsets and all new PCI EIDE controller cards support a 133 mb/sec max burst data transfer speed.
The drivers for the Rocket100's drive controller chipset are probably not built into XP - if they aren't, when you boot the computer from the XP CD, it will not find the hard drive connected to the card.
In that case....
You would have to provide the drivers for the Rocket100 card's drive controller chipset near the beginning of XP's CD loading the initial files from the CD after pressing F6 in order to be able to install XP on a drive connected to the card, on a floppy disk in a conventional floppy drive. (The initial files loaded from the CD will not find the drive controller drivers unless they're on a floppy disk. The same files only recognize a small number of USB floppy drive models that were available at the time XP was first released, circa 2001. )
- or - you would have to make yourself a "slipstreamed" CD that has had the Rocket100's drivers integrated into the original contents of the XP CD, e,g. by using the freeware program nLite.
If you have lots of available free space on your existing 650 mb hard drive, you don't necessarily need another physical hard drive - XP can be installed on the same drive, either as a virtual machine, or by using a "partition manipulation" program, such as the freeware Easeus Partition Master Home Edition, to shrink an existing partition to provide unallocated space to install XP on.
When you set up a computer to dual boot using the built in ability of the operating system, you are supposed to install the older operating system - XP in this case - first. You can install XP second but it's more complicated to get the dual boot configuration to work - when XP's Setup has finished, only XP will boot - you then have to do some things to get the dual boot working.
There is also a major GLITCH when you dual boot or multi boot Windows 7 or Vista and XP.
EVERY TIME you boot XP, by default, ALL of the existing System Restore restore points in Windows 7 or Vista are DELETED.
If that concerns you....
If you have Windows 7 (or Vista) Ultimate or another more expensive version of Windows 7 (or Vista) , you can get by that problem by using the built in bit locker (bitlocker ?) feature. The Microsoft web site has instructions about how to do that.
If you DO NOT have a more expensive version of Windows 7 or Vista, e.g. you have Home Premium or Basic, bit locker (bitlocker ?) is NOT built into the operating system
I got around that by using a paid third party multi-boot program - BootIt! N.G. - and setting it up so the partition Vista Home Premium - Windows itself - was installed on is hidden from XP when you boot XP (there's now a tutorial video about how to do that on their web site).
NOTE that not all third party muti-boot programs support Vista's and Windows 7's support of ACPI features properly - if it doesn't features such as Standby will not work properly - BootIt! N.G DOES support that properly.