Unauthorized memory units are prohibited after the next dashboard update on Xbox Live, which isn’t of mainstream concern right now, but will be to those participating in the Xbox Live Preview Program.
Says Major Nelson :
When Preview Program members start receiving the Xbox 360 system update next week, one of the changes is that unauthorized Memory Units will no longer work with the Xbox 360. If you’ve moved your profile or saved games onto one to “back it up,” you’d better move it back onto an authorized Xbox 360 storage device prior to taking the update. If you continue to use an unauthorized Memory Unit after the update, you will not be able to access your stored profile or saved games.
I’m not really sure how many people use memory card anymore. I have not used a memory card on my 360 since the very first arcade i bought after launch. I’m sure this will infuriate some people, but it seems pointless to me.