Is It Possible to Install OS X on an External Drive for Use with Any Mac?
Yes it is quite easy.

For example, my MAC had a bottle of Champagne poured on it (long story, short) and I removed the hard drive and placed it in another machine. I also later took that drive and placed in an external enclosure and booted from it by using the "OPTION" key when booting. This brings up a list of all accessible drives INCLUDING NETWORKED DRIVES if accessible.  So you could configure your DEVELOPMENT drive on your network and boot from it HOWEVER unless you have GIGABIT network it would be slow. 

So to create an external bootable self contained OSX drive I recommend the following tutorial, BE ADVISED it will clear off any data on the external drive and your doing all of this at your own risk.

http://support.apple.com/kb/ht5911