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By S-T-H at 03/26/2010 - 2:02pm
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 A post at Major Nelson's blog has appeared with details regarding support for USB memory devices on the Xbox 360. A system update will be going out on April 6th which will expand on the memory storage and management options for the console.
To use a flash drive or HDD, it must be at least 1GB in size. It will be possible to declare up to 16GB (depending on the size of the device) to be used for Xbox 360 related storage. It will also be possible to use two devices at once (for up to 32GB of external storage).
Pictures of what these new options will look like are featured in Major Nelson's flicker account.
As a side note, official Xbox 360 250GB HDDs are heading out to stores. They will be retailing for $130 in the United States. It appears that they are set to replace the 120GB HDDs that are currently for sale.
Update: The system update is now going out to all Xbox 360 owners. A FAQ is available here.
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XBLA games and DLC are getting so big these days that the space really gets used up fast. Throw in some game installs and it doesn't take long for things to get cramped. I'm sure I'm not the only person who has passed up buying additional arcade games and DLC due to limited available storage.
I'm wondering what'll happen to the prices of the 120GB Hard Drives when the 250GB releases. I've heard the 250 is a replacement, so hopefully that means dirt-cheap 120GB drives for a while.