Got two options for you, both of which are $26 shipped (each).

Option #1: Microsoft 20GB Hard Drive
This sleek, stylish hard drive will make your Xbox 360 the belle of any ball! Officially produced and shipped by Microsoft, so you can take comfort in knowing you aren't getting some cheap knock-off made by some Chinese street urchin in a dimly-lit factory located in some back corner of the Orient. Was originally part of my Xbox 360 until I kicked it to the curb after getting a 250GB drive for Christmas. As of December 2010, it was working perfectly and I have no reason to believe it wouldn't continue to do so.

Option #2: Lexar 16GB Jumpdrive "Firefly"
So let's say you've already got a 20GB drive that is filled to the brim with digital gaming goodness, and you need a bit more breathing room. Don't want to pay the ridiculous costs that Microsoft is asking for their bigger hard drives? Why not jump into a Jumpdrive? Jump into a... get it? The 16GB Firefly will give you the maximum amount of space you can get from a USB device on the 360, and is small enough to not be an eyesore when connected to your console. (It should fit in the back USB port even, but I can't 100% say for sure.) This drive is still brand new and sealed in its package; it was bought for me for Xmas before I knew I'd be getting the 250GB drive, and the company it was purchased from had a ridiculously short return window that was long since past when I received it.

Payment is preferred in the form of Amazon gift credits. Easy for you to buy, literally seconds for you to send to me, and then your fabulous purchase will be flying its way to your loving arms! PM me if interested.