I have a Lenovo laptop with XP loaded on the c: drive and linux running on an external hard drive. I primarily use XP with this machine, and everything works great when dual booting. My problem is that booting hangs with the external drive disconnected. I sometimes travel and do not want to take the external drive with.

When I boot the laptop with the external hard drive disconnected, the boot seems to hang with "GRUB" printed to the screen.

Ideally, I would like to be able to boot into XP when the hard drive is disconnected. I sense that I made an installation error with the location of the master boot record, and GRUB is not able to find it with the disk drive disconnected.
If not, it seems that one option is to recreate the master boot record on the c: drive with "fdisk /mbr". But being new to linux installation, I wanted to check on what options I may have to maintain the dual boot.

Is your laptop new enough that it has a boot from USB option in the BIOS?

If it does, I'm pretty sure you should be able to move GRUB to the MBR of the USB drive and restore the internal hard-drive's MBR to Windows. That way, you would hit the boot options key when the computer is booting and choose USB if you wanted Linux. If you didn't do anything, then it should boot to Windows.

You'll have to read the GRUB documentation to find out how to move it, unless somebody who knows replies.

Hook up the external USB disk and boot up the Linux.

Edit /boot/grub/menu.lst and put a "#" at the beginning of the line "splashimage=????????". Save the file and you will be able to remove the external disk in future bootings.

Explanation

Grub has been asked to load a splashscreen image stored in the external hard disk. No external hard disk and Grub doesn't know what to do. You will do the same if you were Grub.