I have no experiences with Fedora, but was successful installing SuSE 9.1 on an external USB disk. See the thread here on linuxquestions.org:
The general approach I used for SuSE is as follows.
(1) Select manual install
(2) SuSE offers to manually load additional kernel modules prior to booting up completely.
At this point you need to load scsi_mod, sd_mod, uhci-usb, and usb-storage,
to name the most important modules.
(3) After loading the appropriate modules, I could see a flicker on your usb drive lamp,
indicating that Linux has found the device.
(4) Now I commence the install process and select the appropriate usb partition.
As mentioned in an earlier post, this would typically be sda1 for the first partition.
Once installed, there is another difficulty to overcome:
How are you going to boot your installed system?
For details, see also the thread mentioned above.