The system won’t just configure the device once it is connected to the console. You’ll need to head to the memory area in system settings, select your 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.)Update: Check out the Microsoft branded 16gb USB device below, set to launch in May sometime.

{Image via: Joystiq)




Aaron W 