MajorNelson said:We’ve just released a system update for the Xbox 360 over Xbox LIVE.
As previously announced, this system update contains support for USB Memory storage devices.
Sometime over the next few hours when you sign in to Xbox LIVE you’ll receive a prompt to accept this mandatory update. If you are signed into LIVE already, you may be signed out and asked to accept the update and you’ll be back online in a few moments.
Post your comments here, or drop by the Xbox forums to share your experience with this new feature.
http://majornelson.com/archive/2010/04/06/xbox-360-system-update-usb-memory-support.aspx