Proving the rumors true, Microsoft spokesblogger Major Nelson announced this morning that beginning April 6th, Xbox 360 owners will be able to use USB drives to store their game data including "profiles, games saves, demos and more."  Details:

• He recommends flash memory over a spinning hard drive.
• You can configure how much of the drive you would like to use.
• Up to two devices can be used at a time, "enabling up to 32GB of simultaneous storage."
• You need to go into system settings to configure the drive for use.

This announcement comes on the heels of a lawsuit by Datal after Microsoft removed access by unauthorized memory units through a system update last year.  Speculation rose that this was a case of Microsoft enforcing expensive and restricting licensing in its 360 peripherals, but it appears that they may simply have been laying the groundwork for allowing users the choice of using whatever storage they choose.