Microsoft has finally released the update allowing the use of USB external or flash drives as storage for the xbox 360.
It seems like a good step forward in allowing the use of third-party accessories, but limits us VERY much. The space you are allocated to use on your flash drive is strictly limited to 16GB. No more. You can choose what size you wish it to make, but still no larger than 16GB.
I've already found a couple topics on 360iso about people already abusing this update. In the future (i'm hoping) there will no longer be a need of burning your games to a Dual Layer DVD. Instead, you would transfer the game files over to the flash drive as an installed game. Burn a portion to a plain DVD, and play!
Right now, the only known "hack" for this update, would be viewing the files on the flash drive, which right now is encrypted. So think again if you're going to attempt to edit these files.
Here's a link to my tutorial:
Clicky Me