Your question actually prompted me to register. Figure that!
What you speak of regarding dual booting using a USB/Firewire drive is possible, although I have not done it myself. So long as the USB drive is recognized as a bootable device, should work without a hitch. Be forewarned, if you intend to use a large USB key flash drive...not all of them can be configured as bootable.
A couple of options you may not have considered:
1. Resize your current partition to make room for a Linux partition (or more). Hack #74 in O'Reilly's outstanding title, "Knoppix Hacks" provides insight into how to do this easiily using QTParted or ntfsresize, both of which are installed on the CD included with the book. This is not for the faint at heart, and requires you to defragment your existing partition prior to the resize for optimum results, but it is a viable solution. I've used it myself.
2. There is a hard drive adapter for the new slim Ultrabay port in the T42 line. This allows you to add a second 2.5" hard drive that will be recognized as a second native IDE device for your partitioning (or backup) pleasure. The part can be found here:
If that fails to provide you with a page (as IBM specific addresses sometimes go away), I found it from the main IBM page under Upgrades and accessories -> Thinkpad upgrades -> Drives/storage -> Hard drives. Part number is 62P4554.