D-i is straight forward, just select the USB disk. Instead of grub I prefer to run with SuperGrubDisk because that allows you to search for the right partition and fill in what the rootdevice is. Otherwise you are always messing around with what the disk number is. Because that changes.
Pro: much easier to change the disk.
Con: slower than an interior disk. Except when you can use the SATA cable on the exterior disk, but I have trouble with my mobo on that.
I've successfully installed Debian Squeeze on an external USB disk. At first grub was incorrectly installed on the internal disk, which caused the system unbootalbe. Then I used the install disk as a rescue and fixed the issue. Thank you all!
Best regards,
Yuwen