I bought a new pc for my work which has all the bells and whistles.
Of course the kids want access to the pc so that they can play the
latest games.

I prefer not to install any games on the pc. I have a couple of
licenses for both Vista Ultimate and XP Pro.

Is there any way to install either Vista or XP on a USB drive and
install their games on that. When they want to play, they can just
boot their drive off USB, making use of the hardware on my pc?