Windows 8.1 Update

Can anyone help me, I am trying to update to Windows 8.1 but I need to make sure it wont mess up my laptop.

This is how I want My disk drive listing with OSes:

Laptop Hard Drive (160GB)
Windows 7 Ultimate x86
WD MyPassport (External) (500GB)
Windows 8.1 Preview

Can I just install it from disc and put it on the HDD so when I boot my laptop WITHOUT the external hard drive in it will boot Windows 7 and WITH the external hard drive in it will let me choose if I want to boot Windows 7 or Windows 8.1 or will the answer be different

Welcome to EightForums.

NO, you can not use a External HDD.

But you could make a Windows To Go
http://www.eightforums.com/tutorials/14108-windows-go-create-windows-8-enterprise.html