Yes, WoodyZ you are correct. I'm trying to install OS X directly to the USB external drive in a virtual machine.
Thanks for the helpful reply.
I'm a bit confused. You are used a Mac OS X 10.5 VM, and plugged a USB 3.0 device to your 10.5 VM, and then you want to install a OS X from your Mac OS X 10.5 to the USB device. Am I right?