This is for "hackintosh" setups, just to point out. Mach/OS X itself, on a real machine, actually treats all block devices identically - without hacking around, you can boot a Mac off of anything, be it a USB stick, a harddrive attached over USB or FireWire, even booting one Mac from another Mac's internal storage by directly linking the two via FireWire (so-called Target Mode).
I've successfully installed Snow Leopard from a USB drive. You can also install it to a USB/FireWire drive. If you're particularly adventurous, you can put the installer on a partition of an external USB/FireWire drive and, from there, install it to a partition of another USB/FireWire drive.
You will, of course, need a Mac to do all that. In some cases you might also need a working OS X install.
EDIT: I realize everything I mentioned above is possible with a Linux distro, but doing this is far easier on a Mac. You just go to System Preferences, select a boot volume and you're good to go.
