16GB Usb won't appear on storage

You can use a USB flash drive larger than 16GB. The 360 will only allow use of up to 16GB for storage.

My own USB stick is a 32GB flash drive. This allows for a full 16GB of storage space. Using a 16GB USB flash drive results in a maximum MU size of 14.3GB.

Are you simply using it via the USB. it won't recognize it via SATA (if that's hat you were trying)?

Just an fyi, once it does "see it" and it's Formatted properly by the Xbox 360, it will only be 16Gb Maximum. In short, it's a lot easier to simply use a 16Gb USB Flash Drive. But it won't be recognized as a HDD either. Games and Game Features that require
a HDD will not work with only a USB Storage Connection.

In addition, there is no "Disc" or anything that needs to run by the Xbox 360. It is either a correct Formatted USB Storage Device or not. The Disc mentioned in the Transfer Kit is simply to Move Content from one Storage Device to another, not Format anything.

Sorry but all Drives (Flash or Hard Disk and regardless of if it's bigger then 16Gb) Connected via USB are limited to 16Gb of Storage Space. The Max you can use at anyone one time is two USB Connections at 16Gb each for a Total
of 32Gb in Storage.

See
this for additional help;

Yes but you can only use 16GB of storage space of any USB device. up to 2 devices can be used at a time giving a total storage of 32GB.

Even if your USB hard drive is 500GB you can still only use 16GB.

[quote user="PliantWord8768"]How can I connect the Kinect sensor, an external hdrive and the internet adapter all at the same time?[/quote]

You have to connect the Kinect to the rear USB (not the front USB). There will be two USB Ports on the front of the Xbox that you can plug a storage device. You can use two USB storage units, but only 16Gb per USB (total 32Gb).
If the external hard drive is larger than that 16Gb, the rest of memory will not be used.