I'm considering Kubuntu 6.06 Dapper for my inspiron. Mainly because the live CD seems to overcome issues discussed in other posts regarding getting Debian to work with all the internal hardware.

I'd like to install it to my external USB drive first, but I wish to retain the internal HD as shipped. (3 partitions with a "alt-f11" restore to factory option.) so I can't mess with the MBR at all.

So I guess what I am asking is can I in fact install Kubuntu like this and set my bios to boot the USB drive first and leave the MBR on the internal drive untouched?

if your bios supports booting from a usb device, then yes. If it doesn't then you need to make a floppy disk and have it boot from that.