According to Microsoft, drives below 1 GB or over 32 GB are not supported.

USB minimum requirements

To use a USB flash drive with your console, the USB flash drive must meet these requirements:

• A minimum of 1 GB storage capacity.
• Formatted with the Windows FAT32 file system. Macintosh or Linux formats do not work.

Why does Xbox 360 only support 32 GB of USB storage?

Supporting 32 GB of storage space on USB flash drives is a huge increase over the original Xbox 360 memory unit. If you need additional storage, consider adding an Xbox 360 Hard Drive. See Xbox 360 storage options for more information.

Instead of a flash drive, you should consider getting a new Xbox 360 Hard Drive.

What other storage options do I have?

The Xbox 360 320-GB Hard Drive is the best option for media enthusiasts. You'll have plenty of space for games, HD TV and movies, Games on Demand, game demos and add-ons, music, and much more. Certain games still require a hard drive in order to play system link or Xbox Live multiplayer games. For multiplayer gaming, it is recommended that you use a hard drive.

According to Microsoft, drives need to provide at least 1 GB of storage space and must be formatted using the FAT32 file system. You can format up to 2 TB to use on the Xbox 360. Formatting can be done on the console, so the drive doesn't need to be pre-formatted.

USB minimum requirements

To use a USB flash drive with your console, the USB flash drive must meet these requirements:

• A minimum of 1 GB storage capacity.
• Windows FAT32 file system format

According to the USB flash drive FAQ, you can store everything on your flash drive, excluding games for the original Xbox, which need to be stored on an Xbox 360 Hard Drive instead.