March 26th, 2010 
Eksy 
Major Nelson has just announced the system update that will allow Xbox 360 users to plug in their own USB sticks for use as storage is going live on April 6th.
It’s noted that he does say a USB hard drive may work, but a flash drive will give you better performance.
Remember there is a limit 16g per device, so a hard drive wouldn’t be necessary anyway.
You may also use up to two devices, allowing for 32g of extra space.
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[...] up the Xbox this morning I was pleased to find our anticipated updating arriving right on time. As posted previously, this update allows the use of flash drives as portable storage! It also makes a few adjustments to [...]