How do I add a Windows operating system to an external USB drive?

Pretty sure you can't. Windows wants to boot from a C:.

You can BUT only if its going to be used in the same machine every time due to installation of devices.

Can I operate to different operating systems? The original XP Pro and on the external drive Win 2000?

Win 2000 won't boot from an external device in this manner.
XP can and does.