External SATA HDD

As the title says, can i fit one of these and install a fresh OS on it like Windows 7 for example or will i be just better adding the HDD to my tower case.
I already have two HDD's in my system with Vista Ultimate 64bit and Vista Home Premium 32bit.
What would i have to do if i fitted another clean HDD to install Windows 7 on it??
I have been tempted to simply unplug the existing HDD's to avoid confusion and reconnect them afterwards but am not sure if this is the correct way of doing it.

Thanks.

From a former user of Vista and now use Seven. I firmly believe (others will post that Im wrong) that there is no need for both Vista and Seven. It has been said many times in the Seven forum that Seven is Vista under the hood.
Actually the release of Vista was probably a money call. MS wanted money. Vista should not have been released (in my opinion). There were many incompatbilty issues, no big change from XP etc. Seven should have been given free to all Vista owners (my ooinion, again), because Seven was just a, ready for prime time, OS and Vista was not.
In fact, not to admit a mistake, but to be fair. MS offered a pre order sale. All those that bought Seven in July and waited for the release in Oct got the OS for $49.99 as an upgrade version. That is how I got Seven. Bottom line, go with the upgrade version and you will no longer need Vista. We can show you how to upgrade and have a version that is as good as the full retail.