This is handy for someone who has a 4G Slim or Phat 360 without a official xbox 360 hard drive but who owns a large Usb hard drive and uses it in the xbox 360 but is annoyed that only 16GB can be used, when the hard drive is in fact much larger.. But fear not.. I've found a little workaround to this problem.
What you'll need:
A PC (any pc with usb 2.0 port,)
A USB STORAGE ( usb harddisk, anything.. the bigger, the better)
First off, you must have connected your USB STORAGE to the Xbox 360, and it should be configured and showing the 16GB space you can have. Once you do that, when you plug the usb device back into your pc.. showing all hidden files is a must on the folder options.. You should see this folder named "Xbox360" and it should be 16+ GB in space.
Now how do I expand that.. that's pretty simple..
Just copy that folder and paste it to the root directory of your USB STORAGE..and rename it Xbox 360 - A folder. But It's is not the one which will work when you put back the USB STORAGE to the 360.
The folder with the name "Xbox360" will the storage used and loaded as an MU.
To use the "Xbox360 - A" folder as the MU, simply rename the "Xbox360" folder to "Xbox360 - B" and then rename the "Xbox360 - A" to "Xbox360" and vice versa as the needed.
Now you have an actual 32GB of space for game storage on the USB STORAGE although you have to rename the folders periodically for games installed at different folders.
And yes, you can make as much copies of that folder as long as the USB STORAGE can handle (in my 120 gb usb hdd, I've made 4 copies of it that sums up to 64GB space for game storage) and just label them accordingly so you won't get confused (Like Xbox360 - A, Xbox360 - B, Xbox360 -C, Xbox360 - D) and don't forget to rename the folder you'll use as an MU as "Xbox360"
It's kind of a little hassle to rename folders but hey, you won't have to do this everytime. Just when you want to back up games and save your DVD drive for early retirement, it's something worth it I guess. And renaming doesn't really take that much long I think, unless you don't know how to operate the computer.
So there.. I hope this was helpful to you guys.