My Xbox360 recognizes the external hard drive but will only allow use of 1.3 GB. I have a 320 GB My Book. Is there a settings option that opens the use of more storage? Or is there a cap that only allows the use of a portion of an external hard drive?
no, the problem is that microsoft has a propritary harddrive format for the xbox360 (fatx) So you won't be able to use the full capacity of it.
But like someone else stated earlier, if you reformat the drive you will be able to see each partition up to 16GB. I had the same problem with an old xbox360 harddrive that i reformatted on accident and lost the ablitity to use it as a primary xbox harddrive. Hope this helped