Cant install windows 7 iso onto usb drive

I am trying to install windows onto my macbook pro. I bought an external usb drive- La Cie porsche design and formatted it to be a fat drive. I have my original installer dvd for windows 7 and have created an iso image as directed by bootcamp assistant using disk utility. I used the 64 bit dvd. This was installed onto the documents portion of my macbook pro. As I launched bootcamp assistant, I was able to select that Iso image but it wont allow me to proceed further because it states it cant use the external drive. There is no option for me to choose which partition to use for the hard drive. Thanks for the suggestions.