Possibly, but not like that I think. Try running the installer, and when it asks you for an install path, direct it to the USB drive. Run and let it patch, then it should work. But I'm pretty sure map loading is going to be slower than usual.
Yeah, you have to click the custom install option on the setup page, and point the thing to your USB. Map loading is a little slower, but I still load faster than some folks. It's how I have to do it, given my current computer situation here.
Close your eyes, turn your head, you don't have to watch. They'll be dead and you'll have the final word; this is what they pay me for.