Xbox 360 consoles are manufactured by Microsoft and distributed with an internal user interface or "Dashboard." The Dashboard can be used to format an external USB hard drive for use as an Xbox 360 memory unit. You can then install 360 games to the USB hard drive after it has been formatted by the console. The process will take approximately 30 minutes.
Insert your USB hard drive into a free USB port on the front or rear of the console. Turn on the Xbox 360 and wait for the main menu or "Dashboard" to load fully.
Move the analogue stick to the right until you see the "System" tab. Select "Memory" with the "A" button and press "A" again on "USB Device." Select "Format USB Device" to format the USB hard drive for use with the Xbox 360. Wait for the console to finish formatting before continuing.
Press the "Eject" button on the DVD drive and place an Xbox 360 game in the disc tray. Close the drive and press "Y" on the game's icon in the Dashboard. Select "Install Game to Hard Drive" and press "A" on the controller. The 360 DVD will be copied to the USB hard drive and you will be able to play it when copying is complete.
Formatting a USB device will erase all data on it. Back up any important files before formatting.