The firmware on head units is limited to a couple of gigs, Ive tried a 4gb usb stick on mine, works, a 16gb usb stick, wont read it at all, Ive also tried my 320gb western digital passport and I can tell by the drive LED blinking bright/dim that its not receiving enough power to run the drive (I get the same error if I use a usb extension cable on it from a PC).
So to cut a long story short, the head unit would need new software written to read larger drives and in my case the power output upgraded to drive the external harddrives too.
Hope this helps
Jonny