I have an external hard drive connected via FireWire and an OS X 10.8 instalment on it. I can boot to it by selecting it from Startup Disk. But what I want to do is create a virtual machine and use that external hard drive as its hard drive and boot the os. Is it possible? How can I achieve this?
It's not possible, this would be the equivalent of Bootcamp (Windows) partitions on Parallels, but there is no such support for OS X real partitions.