Hi there
you CAN install windows to go on an external USB drive and all downloads etc work normally.
I use an old 2.5 inch laptop hdd. create say 2 partitions -- one for the OS and another one for the data.
Works fine 100%.
Note that there are a few get arounds for the USB problem but I'm quite happy to have my Windows to go on a small ext usb drive.
Cheers
jimbo