To create a bootable external driver for a mac follow the following steps …

* With Disk Utility – Partition the attached USB drive as one “GUID” partition. This setting is found in the “Options” button in the partition window. Name the partition something like “External Drive” so that it is easy to recognize later …

* Using a “retail” copy of the Mac OS installation disk, install the mac OS to this new disk
— A retail copy of the OS is important so that the new disk can boot all current mac hardware

* Once the OS is installed, boot to the attached hard drive by holding down the “Option” key and selecting the external drive to boot from. (if you’ve named it “Macintosh HD” like your internal hard drive this may be a bit tricky … )

* Run Software Updates while booted to the external drive and add any additional applications or data you want.

I frequently create external boot disks so that I can “image” computers. One imaging tool is Carbon Copy Cloner.