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Nonstop backup

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I am planning to upgrade to Acronis 2010 and the nonstop backup has attracted me. Can the nonstop backup be taken to an external usb2.0 hard disk ? Would it slow down the system or create any problem?
I have xp home with 4GB ram

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Can't guarantee there won't be any slowdowns or issues on your particular system, but it's working fine for me. I'm using it to backup my C: (pure system partition, just OS and applications, no data) to an external USB drive.

There is some slowdown after rebooting, since it does a full scan to catch up with what's happened while it was inactive, but once that's done I don't notice it at all.

Test it yourself before putting down money. There's a trial for a reason.