Turn on your Xbox 360 today and get prompted for a little bit of an update. When done, you'll be able to use any USB thumb drive or storage device up to a maximum of 16GB to store your stuff. It's about time and I wish Microsoft did this a little while ago before my other one died so I could save off my Fallout 3
My saved games and characters is locked in my old non-working Xbox 360 and I never did get a transfer cable to get them off. In any case, I'll have to see what else I can archive off of my current setup to free up a little bit of room. Maybe someday we can get a USB drive option without the limitation on size. Maybe someday.