I'm planning to make a complete install of Ubuntu on an external hard drive in order to use Ubuntu without touching my internal hard drive. Does it have limitations? Will it perform slower than a "real" install or something?
It'll be slower than a proper SATA connection most times. The notable exceptions are USB3 over SATA1 and SATA2, external eSATA over internal SATA1.
By slower, we're talking a maximum throughput of about 40MB/s on USB2 vs over 100MB/s on a good 7200rpm drive connected via SATA2 (that's the 3gbps version). Advanced features like queuing might also not be supported. And finally, seek time will be somewhat slower too.
You also need a BIOS that supports booting to USB. Thankfully most modern BIOSes won't have an issue doing this.
One note for installation: You'll need to unmount the drive when you boot to the LiveCD because by default Ubuntu will try and mount it and that will interfere with the partitioning. You might have to keep unmounting drives as they appear (once partitioned) so the installer can continue unimpeded.
If you can plug it in internally, or use a eSATA port, do that.
It will work, you can even do it with a Live USB but for a full install, an internal SATA drive would be faster than USB drive.
Depending on the computer you're using, it might actually be easy to swap the hard drives for when you want use Ubuntu. Sometimes USB drives have just a couple of screws which would let you take a standard SATA drive out that you could plug straight into the computer.