Having installed and used and/or using Ubuntu on an ACER and ASUS
netbook I would say yes. However, I have always installed onto the
internal HD, after Windows was installed, thus a dual-boot.

I don't see why Ubuntu could not be installed onto an external HD. You
just have to make sure the drive is recognised by the computer and the
Ubuntu Live CD/USB. After that it seems to me that you need to pick
the correct HD to install it on.

To play is safe, first boot the Live CD/USB without the external HD
installed, start an install until the place where the partitioning
setting is being set and note the name of the HD present, probably
SDA. Then boot with the external HD hooked up. Now another HD should
show up, probably SDB. You might also be able to tell the internal and
external HD apart by the partitions and the sizes of the HDs and their
partitions.

Make sure you are installing on the correct HD. Don't install the
Master Boot info on the external HD or you will have to have the
external HD hooked up just to boot up.