Thanks for the breakdown guys.. I did quickly try it while powering it from a 12V source to the external connector, and I received a "USB Device Not Recognized" error. I removed the external power but still received the same error until I disconnected the USB and reconnected it. I will try it again to see if it was just a mishap. If I get the same behavior again I guess it is safe to say while using it normally and powered by the external power connector I wouldn't be able to communicate to/from a computer using the onboard USB/Serial converter. If that is the case, instead of wiring a max232 or some kind of FTDI chip to the pins 0/1, I think my initial proposed solution makes more sense and is a cleaner design (powering the USB pins with an external +5v source).
I will keep you guys posted on my findings. BTW, the nano board I have is a V3.
Randy