From today on you will no longer be limited by your Xbox’s Storage capacity, you can now increase your storage with USB Memory Sticks instead.
Just as we reported earlier on in March Microsoft are rolling out the update today which will allow you to connect up to two USB memory sticks between 1GB & 16GB to increase your total memory capacity by up to 32GB. This will allow you to take arcade games, movies, downloadable content and saved games with you on the go.
In theory you can use any USB stick with it but you will need to configure it first. To do this simply -> Plug it in and go to System Settings, Memory, then select your device to start setting it up.
Microsoft have also teamed up with SanDisk to sell pre-configured Xbox 360 8GB/16GB USB Flash Drives which come with a one-month LIVE Gold membership. They aren’t expected to start shipping until May.