I installed fedora 7 in a 40gb usb external hard drive from the live cd.I installed the boot loader in the external drive. I am using a dual core desktop at college. I booted and ran fedora from the usb hard drive after enabling "BOOT USB DEVICES FIRST " in the BIOS.At home I use a coreduo notebook.Its BIOS entries are different.I set the boot device priority as usb hard drive,usb memory stick,cd/dvd rom, hard disk but it doesnt boot from the usb hard drive.The cursor blinks and boots into windows from the internal hard drive.But it boots ok from a thumbdrive if usb hard drive is disconnected.With both usb devices connected it boots into windows from the internal hard drive. What could be wrong ?

Simple.

You probably installed F7 as sdb in the external hard disk while the internal hard disk in the desktop was the sda.

Your laptop has both USB thumb drive and an external hard disk. Did you ensure the thumb drive was not robbing the sdb device name from the external disk? If in doubt remove the thumb drive.