How to connect any external USB drive to XBOX360 and use all its capacity above 16gb

Most of console users know that Microsoft gracefully allowed their customers to use USB drives as Xbox360-enabled storage.
However, if your old good NES or Sega had their limitations justified by inferior hardware, modern consoles are so powerful that marketing guys have to impose artificial limitations to force consumers buy proprietary products. That is official Xbox360 hardrives, which cost 3 times more than the very same Hitachi/WD drives they are rebranded from. On non-proprietary USB drives, only 16gb of space can be used by the console, the rest is wasted.
What to do if you happen to get a much bigger drive and want to use its full capacity? Well, here is how.

First. Microsoft Xbox360 recognize only FAT drives. It doesn’t support NTFS, the proprietary brainchild of Microsoft! Oh, the irony.
Next. What is even worse, only 16gb of that space will be used by the console, all the rest is not available. I.e., if you connect a 1Tb USB HDD (which is 1000gb) an let the console format it, only 16gb will be used, and the rest 984gb will be gone.
Third. Windows doesn’t allow creation FAT volumes larger than 32gb. They corporate guys just like pointless limitations.

You can still use all that space.
First, get a partitioning utility other than Windows built-in. It could be gParted standalone, Linux distributions or live-cds. There’s plenty, choose any.

Second. Connect your hard-drive to the console and let it format it. Only 16gb will be usable by now.
Connect this drive to your computer and copy the entire contents to your computer hardrive.

Now. You must decide how much of the space will be used for Xbox360. The catch here is the FAT32 system. It has a file size limitation of 4gb. You may format the whole drive, but you will not be able to write larger files without splitting. If it’s okay, then just format whole capacity of your drive to FAT32.
Overwise, you have to create 2 partitions. The first one must be FAT32. The second may be NTFS or any other.
Only the first partition is recognized by Xbox360.

After the partitioning is complete, copy the Xbox360 contents to the first (FAT32) partition of the USB drive.
Check if Xbox360 can use it (do not “prepare”, just check).

Now comes the trick. These files in the XBOX360 folder mentioned above is actually the Xbox360 filesystem. Create multiple copies of this folder on the first partition under names like XBOX360_1, XBOX360_2, or any other name you like.
To use any of this filesystems, you have to rename the folder back to XBOX360, renaming the existing XBOX360 to something else. Yes, you have to use a computer for that, but still – it works. It’s like having multiple 16gb thumb drives in one, with greater speed and far cheaper price.

You may backup this folders anywhere you like, including the same partition of the same drive. Actually, you can get one 17Gb FAT32 partition and give the rest space to second partition. In this case you’ll have only one XBOX360 filesystem on the first partition, but you may store the needed other filesystem on the second one.
The pro of this method is larger NTFS space, the con is that copying takes much more time than renaming, and you have not to forget move back unused filesystems from the Xbox360 partition to the second one.

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