Well i personally don't use osx from my firewire drive, that's strictly where i keep old versions of 9 in case i ever need them to beat a bug. But I remeber reading somewhere that osx.1 must be on the first part of the external drive. Otherwise your machine won't find it. I can't remember if it was on the first x number of gigs or on a certain percentage of the drive, but there were specific instructions for being able to make sure you were loading it correctly. Unless you put it on a relatively new, clean drive then you probably aren't in the corect search range. Try looking at apple's support groups or apple's installation info on the site. I probably saw it on one of these two places. might even have been on the intallation read me.
20" 2ghz iMac G5 | 2GB ram | os 10.4 | 15" Ti PB 867 | 1 gb ram | os 10.3.9 | grape imacDV 400mhz | 512 mb ram | os10.2.8/9.2.2 | smc barricade router w/sbc yahoo dsl | HP psc-2355 all-in-one printer | graphire2 | Living happily ever after, every now and then