first thing you need to check is go into your bios and set removable media as the FIRST bootable device. that way it will try to boot off of the USB drive first. try that and let us know what you get.
I would actually recommend that you scap the idea. I assume that this is so that you can learn how to use Windows 2003 Server? Do and download VMware or Virtual PC (both are free to download) and setup a virtual machine. You can then install Windows 2003 Server on your virtual machine, putting the virtual machine’s hard drive on the USB drive. Then you can boot into Windows XP (or what ever is normally installed on your laptop) and when you want to word in Windows 2003 server, you can start the VMware or Virtual PC and fire up the Windows 2003 OS within a window on your laptop. It won’t be quite as fast as you will have two OSs running, but it’ll work fine. My laptop has VMware installed on it and I’ve fired up 4 Windows 2003 servers as well as the Windows Vista OS all at the same time.