Microsoft has announced it will be releasing a system update for the Xbox 360 on April 6th which will provide the facility to use external USB storage for Xbox Live content. Here's the word from Major Nelson below:
Once you take the system update on April 6th, you’ll be able to connect your USB flash drives to your console and head over to the memory section to configure your new storage device. Once you do that, the system will conduct a one time performance and integrity check to confirm the drive is working properly. You will then be able to configure how much storage to use on the device, up to 16 GB. The remaining space on the flash drive will be accessible by your PC or Mac. USB Hard drives may work, but like flash memory, you’ll only be able to use up to 16GB of space. Since performance on flash based USB storage is usually better, I highly recommend using flash based instead of spinning media like a hard drive… it’s just going to give you a MUCH better experience.Awesometown, get more info here.
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