Why don't files from Xbox 360 show up when USB drive is plugged into computer?
When you formatted the USB using the xbox it configured it in such a way that a PC can no longer read or access the files, this happens with many devices including PVR's
The files on your flash drive are most likely hidden. Try clicking on the "Organize" button on the upper left corner of Windows Explorer and go to "Folder and search options". Click on the "View" tab and check the "show hidden files, folders and drives" radio button.