It seems that it is possible after all to install BIAB on another USB drive - I am attempting to do that now. Installation doc could have been a bit clearer. I think that should fix the problem. I assigned high letter to that drive just in case I have several devices already connected.
Same installer errors about CDRipper.ocx popped up and I ignored them.
We shall see in couple hours if installation succeeded.
SUCCESS - this time installer worked and app seems to work so far - need to
do some post-installation setup and hopefully revive my old collection BIAB
tunes.
Thanks for help and encouragement everybody!
Now onward to better musicianship (hopefully...

)