Installing software to external HDD
 

My OS (Ubuntu 12.04) is installed on my 40gb internal hdd. I have a 320gb external that stays attached at all times. I would like to have software installed & runnable on the external hdd instead of the internal. I would just install Ubuuntu on the internal, but the mother board is unable to boot from anything bigger than a 250gb drive (I have tried).
If possible, I would also like my Home folder to be located on the external too (meaning I want saved/downloaded files to go to the external hdd by default rather than having to manually navigate to it). When I click the Home folder icon on my desktop, I want it to open the external hdd directories.
Are these things possible? If so, please give step-by-step instructions.
Thanks!

Easy would be my answer but not really. One way is to change how linux sees folders or how it uses multiple drives/partitions. The second way is to change how installers install. To be honest, I an not sure which way is best. I'd kind of think making it all an LVM managed disk would be easier if the external is always connected. In reality you could boot to the 40G by simply putting loader and /boot on it. Then make all or any collection of other folders on the external.

Maybe others have better ideas.

I was knid of thinking along the same lines, but I am just not sure the process for doing this. I know if I was installing manjaro or Arch, it does this kind on automatically, at least it makes it very easy to do. But I am not sure how to do it in Ubuntu.

I haven't used it in a while but I believe the Ubuntu "alternate installer CD", or however it is termed, allows a more flexible set-up including separate boot partition.
Whilst it will waste some space on the smaller HDD I'd be tempted to just do that and live with it. The alternative would likely be a lot more complicated.

That may actually be a very good idea. I will give it a shot & report backo on how it works.

With 3 os's installed on two large internal drives and a 3 Tb external

i use one large partition on one of the drives as a "share" between ScientificLinux6.3 and OpenSUSE 12.2

i set up a secondary "tree"
/data/SUSE12
/data/SUSE12/bin
/data/SUSE12/lib64
--- and so on --
/data/SL6
/data/SL6/bin
/data/SL6/lib64

then export
$PATH
$LD_LIBRARY_PATH
$PKG_CONFIG_PATH

for the new trees in /etc/profile.local

but for an externel drive you might want to write a udev rule to keep that drive mounted in the exact same place

Any Ubuntu install CD/DVD allows to create a separate /boot-partition, you just have to choose the manual partitioning option.
Usually you should be fine with a 40GB partition just for your /-partition, unless you install very large software packages (from my experience only games are that large), so you may think about putting only /home onto the external disk.

You make a good point TobiSGD -- my / partition has never been more than 40GB and it's currently only 7.5GB on my netbook (which is admittedly tight) and 30GB on my desktop where only 15GB is used for a full Debian install with XFCE, Gnome, KDE and a few other DEs as well as Libre Office and a good deal other software as I tend to install things to look at then leave them due to having so much room.
So, I agree that it's probably most efficient to use the 40GB drive for / and mount the other drive as /home. It's pretty easily done too.