Most modern computers are able to boot from USB. So you can boot from a USB flash drive (thumb drive) or USB external drive as long as you've set up the USB drive to be bootable. Check your computer's BIOS to see if it allows booting from USB. If it doesn't, there's not much you can do.
A bigger question is whether you can get "Windows
" (as opposed to Linux) to boot from an external drive. XP seems to be possible. Vista and 7 are more problematic.
If you want to boot from XP on a USB flash drive, you may want to check one of the how-to's online, like this onehttp://www.poweriso.com/tutorials/how-to-make-winxp-bootable-usb-drive.htm
According to this, there are some hacks/workarounds to getting Vista and Windows 7 to work. It's easier with XP.https://neosmart.net/forums/showthread.php?t=3263
Short answers are "you're both right" and "it depends."