Can I Install Lion On An External Drive To Be An Itunes Server

I would like to install Lion onto an external hard drive solely to house my iTunes and host my iPhone 4 and iPad 1 (to begin iCloud). They both are joined with a MBP that is definitely on its way out, and I would like to merge the settings and files with my iMac where they meet is Lion on the external.

So is it ok to do this? And if so, is there any documentation so I dont screw it up? I will eventually get a new Mac, but for now this is what I would like to do before I lose it. Thanks! :)