It may depend on whether the computer you are using can boot from an external drive. If this is a usb drive, some computers can boot from usb, but you first need to enable that option in BIOS. Also, there may be a key you can press at the beginning of the boot process that lets you select which device to boot from. This would leave the computer intact without changing the MBR.
Another option is to boot from a cdrom or floppy boot disk. A third option is to use the NTLDR ( for XP, Win 2000, NT ) to chainload to the linux loader. There are many how-to posts on this site, or you could google for the terms NT Lilo boot "how to"
or [b]NT grub boot "how to"[b] or read the how to at www.tldp.org
site. This would entail saving a small 240 byte image file on the C:\ drive and adding a line to the hidden, system C:\BOOT.INI file.
You would probably want to re-format the external drive during the installation process so that you are using a native linux file-system. The Fat32 filesystem that are used on most external drives can't save all of the permissions that Linux uses. Also, bear in mind that the read/write performance of a usb or ieee1394 drive will be less than it would be on an onboard ide or scsi drive.