Does your BIOS allow you to boot from an external drive? Do you have the external drive set first boot priority to boot DreamLinux? I'm not familiar with PCMCIA Cardbus and don't know what impact, if any that would have on booting.
If you have XP on your internal drive and have the internal set to first boot priority, you need an entry for DreamLinux in the xp boot.ini file. Do you have that? If not, this link explains how to do that:
You could also install Grub stage1 to the mbr of the internal disk but, if you don't expect to have the external in use all the time, that would not be a good option.
The reason your computer boots straight to xp is because you have no entry for DreamLinux in boot.ini. Boot.ini is a hidden system file in the root (C:\) directory/folder.
If you aren't able to solve this, load your DreamLinux CD and as root, open a terminal and post the output of command: fdisk -l.