Sorry.. you cannot do that... First.. Windows XP Pro must need to check and verify the hardware ID, and also, MUST need to activiate the code. You cannot install on USB harddisk. And also, USB harddisk do not have CPU.. how can boot the machine???
If you want to boot from USB driver, I do not think that it is not a good method. You can boot from CD ROM.
STEP:
first, download the USB windows, and then copy to a CD,about 700MB, then open MY COMPUTER on the desktop, click tool, click file setting, then click view, then do not choose Hide the protective system file. and then, open the system driver C:, copy the hide file, but remeber, dont copy pagefile.sys.