It's not simple to make WinXP boot from an external drive, and requires a fair bit of setting up.
So basically no, you can't clone to an external drive then boot from it. You can clone to an external drive then swap it into your system, then boot from it.
You can easily clone to an internal caddy mounted drive, then boot from that.
Another drawback of cloning, is that to maintain the clone up to date you need to re-clone every time you want to update.
Best way though, IMO is to image to an external drive- then in the event of failure, reload the image back to a new internal drive. Imaging also means you can do Image updates quickly and simply.
Acronis True Image is the outstanding software for doing this.