No, no, no, no, and NO. Not all drives will work with the Mega X Key software if you've been snooping around the boards only USB Pen drives/Cameras/MP3 players whos cards are actually 32Mb (at the Physical level) it will not work. Since there is no translation for FatX on windows the Mega X Key software must work at the physical level so if your card/ drive is any less than 32Mb it will not work. Now there is a hacked version of the software floating around the internet if you can find it. Its been rummored to support many many more drives but Im using an offical MXK USB card and cable

Good Luck!
PS: About using larger drives we've been talking about it on Xboxhacker.net forums but still no luck we have tried getting a USB drive case that the xbox will see and we've found one but we just cant get the Xbox to format the drive to FatX (we've tried with many different 4Gb drives....) If anyone has any information on this it would be of great help!!! Mind you all of this is on UNMODDED.
Thanks