Xbox 360 rosters and USB drive?

[TOMillr]

I know this question has been asked a couple of times throughout the varies roster threads but not properly answered yet:

Since on of the last system updates you can use a regular usb thumb drive like a memory unit with any Xbox 360. Since you can plug the usb drive directly into your pc, is there a need for a transfer cable anymore?

[Lucian]

My understanding is 'Yes, you still need the transfer cable.' Why?

Try and copy an Xbox Original save to your USB drive; it won't work. BC is still tied to the hard drive and only the hard drive.