Yes you can install on separate partitions. Its the same principal how people are able to use windows on a mac. Usually (with ubuntu) it will automatically set up a new partition just for itself with the free space on the HDD. However you can use partition magic to do this. (Be careful with partitioning, you can easily lose everything if you don't know what you are doing).
I do not know if while on your windows partition if you can access files on the linux partition, however it is easy for the linux partition to access window files. It takes a little while to figure out how to actually do it, but I have done it before.
It depends. It will automatically load windows if it can't find the GRUB on the usb hdd. However, I am confused on why you would want to load the GRUB onto an external. If you install the linux on the external, you would still want the GRUB to be on the internal hdd. It is better to load it onto the internal as to avoid extra work and pulling your hair out. Although what do I know, I have never setup an operating system on an external before. That is alien to me.
I was satisfied with ubuntu feisty fawn w/ beryl eye candy. That was the only thing I loved linux for, the eye candy. ... so pretty... anyways Ubuntu was the only linux I have ever used, and I have to say that I enjoyed using it.






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