I purchased two of these SanDisk Cruzer 16GB USB Flash Drives to use with my Xbox 360 after Microsoft released a system update adding USB support on 6th April 2010.
The Xbox 360 only allows up to 16GB USB storage on any one drive so this one is perfect for the job. After formatting in the Xbox 360 it left a little over 14GB storage space. I tested it by installing a game to the USB drive and played it for four hours. The results were fantastic, much improved loading times and the added bonus of a quiet Xbox 360 without the DVD drive constantly spinning.
This USB flash drive is nice and small and I personally like the "switchblade" design which retracts the USB connector when not in use. The only slight drawback is the large, bright orange light behind the thumb slider which shines / flickers when the drive is accessed (constantly while gaming). Although this is a little annoying it's not bad enough to mark the product down.
5 out of 5 from me, great product and super value (17.99 at the time of writing).