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.