Microsoft will roll out a system update over Xbox LIVE for your Xbox 360 to allow USB flash drives to be used for storing profiles, game saves, demos and more. "The system update on April 6, will let you 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’ll then be able to configure how much storage to use on the device, up to 16 GB." A couple of points: You can’ve 2 devices connected to console at a time, enabling up to 32GB of simultaneous storage; System won’t configure the device once it’s connected to console. You’ll need to head to memory area in system settings, select USB Device, and choose from Configure Now (Format and Configure the Full Device), or Customize (you can choose how much memory you want configured for Xbox360 from the free space on the device.) Microsoft will work with SanDisk to offer a preconfigured, Xbox 360-branded USB memory stick, but any USB flash drive can be used.