Assuming the hardware allows for USB booting, and if so, if it doesn't have to be enabled in BIOS.
He said he got it last Christmas, any machine made in the last 3-4 years (probably 5-6 or more) should support USB booting.
Might need to be enabled in BIOS, however the lack of an internal drive implies to me he actually has a netbook and not a laptop (well, technically a netbook is just a subcategory of laptop, with one of the primary defining differences being no internal optical drive), in which case it's almost sure that it supports external drives.
Bluescreening could be one of two things:
1) A bad driver or other corruption of Windows
2) Hardware flaking out to the point where it boots but is not reliable. (For example, RAM with a few bad areas could cause bluescreens and spontaneous restarts. I had bad RAM cause this on one of my laptops. memtest86 is a good way to test for this.)
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