OP answered his or her own question within the question. I moved the answer here
To start, connect the disk via the USB cable to any computer and boot the computer using an Ubuntu 11.04 CD or DVD. At the disk partitioning step, select “Something else.” Doing that and clicking on Forward will take you to the installer’s advanced partitioning tool, which you are going to use to configure the partitions for Ubuntu 11.04.
If the computer you are using has only one hard disk, the external drive you are attempting to use will be detected as /dev/sdb. The “b” shows that it is the second disk detected by the system. The task now is to select the disk and configure the partitions for Ubuntu.
Note: If you are intend to use this installation for serious stuff, it is better that you encrypt the disk. That entails using an Alternate Installer ISO image. You may use how to install Ubuntu 11.04 on an encrypted LVM file system as a guide, if you decide to follow that route.
By default, Ubuntu’s installer configures two partitions – the first for /, the root directory, and the second for Swap. When creating partitions for installing any desktop Linux distribution, my recommendation is to create the following four partitions:
/boot, the boot partition. This is where programs critical for booting the system will reside.
/, the root directory. The bulk of the programs used for running the system will be installed here.
Swap, unformatted disk space for use as virtual memory.
/home, the partition where your home directory will be located. In the course of using the system, files and folders you create will reside in various folders here.
To begin configuration, select the free space as shown, and click on Add.
The first partition will be for /boot. When setting up an LVM-based system using an Alternate Installer ISO image, the default disk space allocated to /boot is 258 MB. However, only about 22 MB of that is used, so anything thing between that size range will do. For this tutorial, the default will be used. The mount point will, of course, be /boot. The default file system is ext2. OK.
The second partition will be for Swap, disk space that the computer may use as virtual memory. The suggested size for Swap is 2000 MB. Select “swap area” from the “Use as” dropdown menu. OK.
The third partition will be for /, the root directory. The default journaling file system on Ubuntu 11.04 is ext4. You may stick with it or choose another journaling file system available. The installer recommends a minimum of 4.4 GB for Ubuntu 11.04, but on a new installation, less than 3 GB of disk space allocated to / is used. Note that as you install additional application after installation, disk space used will grow, so be generous here. I think 10 GB should be more than enough. OK.
The last partition will be for /home. The file system is ext4, and you may allocate all available disk space to it. OK.
All the partitions have been configured. Before clicking Install Now, you need to change where GRUB, the boot loader, will be installed. By default, it will be installed in the MBR of the computer’s internal disk. But that is not what you want. You want to install GRUB in the MBR of the external disk. So, under the “Device for boot loader installation” section, click on the dropdown menu, and select the entry that matches the external disk that you just partitioned. Once that is done, continue with the rest of the installation.
After installation, test the system by booting the computer from the disk. You may use this as a mobile clone of your Ubuntu 11.04 installation.