You might notice an update today when you first turn on your Xbox 360. This new update will allow gamers to use regular USB flash drives as memory units on their Xbox. Prior to this update players could only use their Microsoft branded hard drives and memory cards for storage.
You will now be able to configure up to 16GB of space on any given flash drive for your Xbox needs.
While any flash drive can be used, we are partnering with SanDisk to release an Xbox 360 branded USB flash drive in May that comes pre-configured out of the box and ready to go. (via Major Nelson’s blog)
Major Nelson also advises (via his podcast at PAX) that while any flash drive will work, high quality drives will work better. So If you want your saves to load faster or your game to save quicker, invest in a little something better than a dollar store drive.
USB hard drives are also supported but like the flash drive, there is a limit of 16GB that can be dedicated to Xbox storage. So there is now another option for your Xbox storage needs. It is also an easy way to carry your Xbox profile with you anywhere.
I must say its a step in the right direction for our poor wallets, as Microsoft hard drives and memory units don’t come cheap. But how about a little more space huh. 16GB will fill up fast for the hardcore gamer.