Could I use a 1/2TB USB 2/3 external HDD with an XBox 360?

We kinda/sorta covered this in a couple of questions, but neither seem clear enough to be duplicates:

Can you run an installed Xbox 360 game off of USB flash drives now?

How do I partition my HDD for use on an Xbox 360?

The answer to your particular situation is "kind of." You can certainly hook up a 1TB hard drive via USB 2.0. The gotchas are:

• The Xbox 360 doesn't support USB 3.0
• The Xbox 360 currently only allows for 32GB of useful storage per USB device (UPDATE: This is changing in 2015, and 2TB drives may be fully compatible in the future, see here for details)

To put that 32GB limit into perspective, downloaded games can range from 500MB to upwards of 5GB, depending on the game. You can also install games from disc onto the hard drive or external USB storage, and those tend to run around 6GB per disc installed, give or take.

However, if you plan on using this terabyte drive exclusively for Xbox 360 content, most of it is going to go to waste. It seems like Microsoft's intent with adding USB storage support was to replace the old Xbox 360 "memory card" with the option for using a USB flash drive, as they hint at in the FAQ section of this help page.

These issues may drive you to purchase an "internal" Xbox 360 hard drive, which I believe uses SATA (instead of USB) and is not limited to 32GB.

I have 283 movies on a 500GB USB hard drive and XBox reads it as 16GB. Yet it shows and plays all my movies. Just format to FAT32 with Acronis Disk Director program for PC and enable it with the XBox 360 console. Works on all XBoxs. I can't believe most haven't tried that yet!

The 'official' answer yes, but you will only be able to use 16GB in each logical drive. Additionally I believe the xbox will only allow you to have 2 external drives/usb thumb sticks at a time.