You probably already found the answers elsewhere, but the hard drive stores about 11GB and I seem to be able to use just about any USB memory stick I have lying around. Biggest one I tried is
16GB, although I didn't get it full since I only used AAC coding and not a lossless one for the music I put on it.
(I found that apple lossless doesn't seem to work, but WAV does (sadly no song/id3 info in a WAV file), and I haven't had a chance to try WMA lossless...need to transcode all my apple lossless over to WMA to do that)
I have heard that if you copy music to the hard drive it dumbs it down to maybe 128kb/s compression, but I don't know if that's true for things copied from USB or only for CD's you rip... forgot to look at the free space before I turned the car in.