For what it is worth, you could install to an external firewire drive 
under YDL 3.0.1 but under 4.0 you will have to have an enhanced account 
(YDL net) to download the ISO that will install everything you need for 
an external drive. 
I installed Gentoo to my firewire drive because I could create the 
ramdisk and initrd that will allow open firmware to find and boot the 
external drive refer to this thread 
<http://forums.gentoo.org/viewtopic-t-319825.html>
Good luck, you will certainly learn a lot from this exercise!

Steve
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