On April 6th Microsoft will be providing a system update in which you can now use USB flash drives to store profiles, game saves, demos, etc etc. After the update you will have to connect the device(s) to the console and find the new menu to configure everything. The 360 will check to see that the device is compatible and then ask you to format it, with a cap of 16GB of storage. (You can have two 16GB drives plugged in at the same time, potentially having 32GB of USB flash drive storage available for the 360.)
If the drive you are using is bigger than 16GB, the 360 will automatically partition the amount you set, and you can use the rest of that storage for your computer, or whatever else you may want to use it for. USB hard drives will potentially be compatible with this system update, though they will also have the 16GB limit. Major Nelson suggests to avoid using spinning-disc devices since flash based media is usually a better experience. Nelson will later partner with SanDisk to release an Xbox 360 branded USB flash drive that will be pre-configured for the 360.
Does this memory option appeal to you? You can potentially add an exponential amount of third party memory to your 360, if you feel like having a library of flash drives/hard drives. Or, would you rather just get the 250GB hard drive and have all your information in one place?
Personally, I’d go for investing in the first-party memory. The way I like to organize things works best with separate drives for separate systems. (Plus, my biggest flash drive is 2GB. Not really helpful with this new system.)