Windows 7 on External Harddrive?

I’m interested in testing out the Windows 7 RC on my computer. I’ve heard that it is surprisingly more efficent then Vista and I want to give that a try. However, I don’t want to mess up my existing Windows Vista installation. Is it possible to install Windows 7 RC to an external hard drive (Connected via USB), and is it possible to do it without effecting the internal hard drive? So that I can use my PC’s bootmanager to start Windows 7?