So I am looking at the instructions for installing PlayON on my PBO and they seem pretty straight forward.

a) Automatic mode
extract file, so you have opt.tar file only
copy opt.tar into the root directory of your internal hard disk
open InfoSite (http://PlayOn!HD-IP), in top menu select Optware. If you aren't redirected to Pack page, go to System and select Update option
select Re-install or Update Optware pack and wait until installation completes

Question is.. My PBO I do not have a internal hard drive installed but instead have a 1TB external USB Drive. Does that mean I can't install it?
Also is there all that is to it and just the script and I should see a menu within my PBO or do I need to run some sort of custom firmware on it?

I have telnet into my PBO and found the opt.tar file under /tmp/usbmounts/sda1

My PBO is running latest stock firmware which is from 4/4/2011.

Any help is greatly appreciated!