Frame with external Bearings compatible with older bb?
 

If you have an older frame w. a internal bearing bb such as octalink or iris, can I switch over to the newer external bearings and axle set up? with a crank change of course.

Yes, external cups thread in the same way as the cups and cartridges of an ISIS/Octalink bottom bracket. So as long as you match the threading (English or Italian most likely) and the shell width is correct, the change over is no problem.

Fixed!

As mentioned above, you can use the newer external style cranks on your frame.
One thing... its suggested that you get your bottom bracket shell faced so that the bearings are parallel to each other to lessen any chance of binding and premature bearing weak or failure.

Well, the OP only mentioned an Octalink/ISIS replacement bb so I didn't elaborate further. Sure a square taper cartridge bb will work.

For that matter a square taper cup-and-cone bb would also work but I don't think he is interested in these either.

Does a bike shop have the equipment to make sure the sides of the bb are parallel aka facing or do I have to bring the bike to a machine shop.

Good bike shops will have the bottom bracket facing tools needed. Call around and see who has one.