I'm not sure I have an answer to that and I don't necessarily see some ominous plot between MS, the RIAA and the MPAA but here is what I know about using an external Hard Drive with an XBox 360.
I'll start by stating the obvious: it will have to be a USB drive because you have only USB ports on the console. Now that we've got that out of the way it's going to sound umbelievable but the Operating System of the 360, a Miscrosoft product, does not identify the NTFS format so your drive will have to be formated with FAT32.
FAT32 allows a 2TB partiton so no problem there, it has however a very annoying limitation that to my knowledge cannot be changed and it's a maximum of a 4GB file size. In other words you will not be able to store a file larger than 4GB on a FAT32 drive. It might seem like a no brainer when it comes to photos and music but it pretty much rules out videos, especially high definition videos which doesn't matter anyway because the XBox 360 will not play any type of video from an external hard drive.
So to sum things up, you'll need a USB external hard drive formated in FAT32 and you'll only be able to read photos and music from it.
One final note, USB ports on the 360 are "read only" so don't expect to transfer anything from your console to your hard drive either.
It's all pretty useless when you think about it. Now if you'll excuse me, I'll go back to watching Tokyo Drift in HD streamed from my PC.
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