I think you should be able to install on the USB HDD pretty easily.

1. Plug in USB HDD.
2. Switch on laptop with Ubuntu alternative cd-rom already installed.
3. Choose USB HDD to install on once ubuntu cd-rom has booted.
4. Select Grub to install on USB HDD.

I think that should be it.
You would need to make sure that the laptop supports USB booting first
though for this to work.

Actually, the safest way could be 'wubi'.

From their site:
"Wubi is an officially supported Ubuntu installer for Windows users that can
bring you to the Linux world with a single click. Wubi allows you to install
and uninstall Ubuntu as any other Windows application, in a simple and safe
way. Are you curious about Linux and Ubuntu? Trying them out has never been
easier!"


http://wubi-installer.org/

I just finished with the Wubi download going to an
external HD and it seems to get working as it should.
I get sound, screen looks good, haven't tried my wifi
yet.

Question for all the knowledgeable people, I am
looking for a good book like Ubuntu for Dummies,
Pratical Guide to Ubuntu to keep near me incase I need
help(which I will). So any recommendations?

There is a Dummies book on Ubuntu. I checked Amazon.com and found over
100 books on Ubuntu.

Rather than going to the expense of a HDD, she can run
Ubuntu on her CD
drive using a Live CD. She can either download Ubuntu
(pretty big download)
and burn an ISO or order a free CD from Ubuntu which
will be delivered
postage paid in 2-3 weeks. Using the Live CD she will
get to experience
Ubuntu as if it were on the HDD with the exception
that it won't run as
fast. A small price to pay. As for her XP problem,
she should call MS and
explain the situation and see what they can do for
her. MS should be able
to certify XP ownership from the serial number of her
laptop.

This option is included on the H. Heron iso.
Was able to install & uninstall from within XP just like any other Windows
program.

Lots of good ideas there guys much appreciated :)
I'll see how she wants to proceed.
I also told her she ought to join this group cos its the best.