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While it is possible to run your Xbox 360's files off to a new HDD in case you the need extra space, or in the event of a re-formatting, there lies the problem of finding an affordable HDD certified by Microsoft. Now, in case you already have a specific HDD in mind, but nary a thumbs up from the big "M", TheSpecialist comes in with his HDDHackr v0.82B tool.
This handy MS-DOS based application allows users to run a 2.5" laptop Western Digital BEVS Hard Drive off the 360 as if it were its internal HDD - just remember that this program will only work with the Scorpia Beva series from Western Digital.
Then again, considering that a Western Digital 40GB HDD sells goes for a reasonable US $ 50, we thought the cash-strapped 360 fans here may want to give it a try. As for the app's latest changelog:
Added option to flash the Western Digital back to its original state Much easier to use, no more manual copying of sectors Improved compatibility, should now really work with all BEVS models Bug fixed, that caused flashing of incorrect serial number in some rare cases.
Just make sure to view the bundle's README for the step-by-step installation guide, as well as TheSpecialist's comprehensive FAQ. And as we're already on the topic of porting "alien" HDDs to your 360, Talismoon has an adaptor that should mix just fine with this program - make sure to check it out as well.