Just to chime in. I bought this last week @ this price and for this purpose. It ABSOLUTELY works for my Arcade (phat) 360. Have most stuff on a hdd but installed BLOPS 2 to this flash drive.
Worth noting:
1) On my 360, it only fits in the front ports as the plastic housing obstructs it from 'slipping in the rear' port of the console. Funny but the casing of the drive threw me off at first. You actually push the casing back to expose the port insert -- like the foreskin of a penis, LOL.
2)Once inserted, go to the 'system' area of the menu then the 'memory' submenu. From there, the 360 will take you through a formatting wizard to ready the drive for use with your console. It will also tell you if your drive is compatible, (this one is compatible).
3)For all this minimal trouble, load times are friggin' FAST!
4) If you're worried abt. drive failure, you could always save your gamesaves to 'the cloud' periodically for backup. MP stats are saved by 3arc anyway 'for anti-cheat' purposes.
5)You still need the gamedisk in the console drive, of course. You'll see lots of kids on youtube asking why they still need a game disk. Answer: piracy would be that much easier if the physical disk wasn't still required.
For ~$6, this was a great buy for me.