I forgot to comment. The external usb drive I am using is one of these:

http://www.wdc.com/en/products/products.asp?driveid=561

And so fare I have had some SUCESS!! now I get past all the text in chameleon boot but it hangs at the white screen before an apple icon comes up. So YES! Your scrip has made progress.

1 Question: I have the Snow Leopard dmg file on my desktop. Do I only drag it to source and the formatted Snow (thats what I call it) disk (External drive on destop) to destination and then restore. Do I still have to install Snow Leopard dmg over that once its been restored.....thats what I'm not clear on (sorry if you have explained it)
Thanks