Yes, you can technically use a flash drive, external drive, etc for storing a paging's automatically listed as an option when you go to manually adjust the settings. However, there are two things to note:

1.) Given the age of the computer it uses USB 1.0, meaning unless you add a USB 2.0 PCI card it will most likely offer worse performance than your hard drive.

2.) If you ever removed the flash drive before switching the paging file back to your hard drive you would encounter potential errors and crashes.

Personally, for the limited performance increase I wouldn't bother. With Windows Vista, however, the ReadyBoost technology will perform a similar task automatically and give you a much more significant performance increase. Something to look forward to.

Hope this helps,