I have used several sandisk usb drives successfully on my Jazz, and now on my Civic. Files must be either mp3 or wma. I did have a problem when I tried editing stuff on the drives and then got the unreadable files message, this was fixed by reformatting drives, and re-copying files . I do this by copying folders from my computer to the usb, each folder being a cd. I don't know if it's the best method but it works for me !
Hope this helps.