No, what you did was overwrite the bootloader installed by Windows.
Do you know if the Linux distribution you installed (and which you neglected to indicate in your profile so it's not automatically displayed in you name block) uses the old GRUB or the newer GRUB2? If it's GRUB2, then just boot your distribution and run sudo grub2-mkconfig -o /boot/grub/grub.cfg in a terminal window. Then both your removable drive and your XP should be in the boot menu.
Of course, since the boot menu is on the removable drive, you will only be able to boot with the removable drive installed - even if you don't intend to use it after booting. Perhaps that's your current problem as well, Did you try booting with the drive connected?
What I usually do when I'm setting up a laptop to use a removable drive is to leave the bootloader on the laptop alone and install the removable drive's distribution(s) bootloader on the drive. Then I just change the laptop's boot priority order so it boots first from any removable drive and, if no such drive is found, then boot from the internal drive.
By the way, if you can find you XP installation media, you can boot from that, start the installation and (after a few prompts), select "Rescue" and have it recreate the XP loader. But, before you do that, boot your external distribution and use the grub command to install the boot loader on the that drive. Then you can use the scheme I described above to boot as you wish.
As to your wireless problem, you're probably missing a device driver it needs. Which is strange, since the recent kernels have most drivers included. (Again, without knowing which distribution you installed, it's hard to offer any advice.)
Oh, to keep the moderator happy, consider starting another thread about the wireless problem. (And search the forums for mention of you specific wireless device.)
Last edited by PTrenholme; 08-02-2013 at 08:19 PM.
Reason: Typos - the cat was helping . . .