well i'm assuming you are using a macintosh computer. and in that case you are going to need an external firewire drive. (or eSATA if you have the proper expresscard) this way you can boot off the drive. you wont be able to install the OS on a USB drive because you cannot boot off of a USB Drive.. Firewire on the other hand you can. but i may be wrong the error messages may be useful. so you have vista on your internal? and you want windows 7 on your external?... so then correct me if im mistaken, you want to partition the internal drive into two pieces. one for vista and one for win. 7? if that is the case, then you want to backup all your data onto your external. then use your original install CD's to boot. then from their menu go to the top menu and there will a tab saying utilities. you go Utilities->Disk Utility then select your internal disk. go to partition. set your partion data as you want then click partitio.. it wil rpompt you asking if you are sure u want to delete your existing volumes. MAKE SURE YOUR DATA IS BACKED UP. click yes. it will partition. install one of the OS's on your drive. boot off of that and then install the other OS on the other partition....
that is a long confusing explanation... let me know if you need other help..