Download a program called Xbox Image Browser. Create a folder on your external hard drive and make the name the game you are going to extract.
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Now open Xbox Image Browser and open the xbox game iso within the program. Extract the iso to the folder you created on your hard drive. Delete the System update folder to prevent accidentally updated your xbox. Plug your external hard drive into your xbox 360 console.Turn on your xbox and open xex menu. Go to your external hard drive and you should see the folder you just created. Open the folder and you should see a file named default.xex.
Play default.xex and the game should play. ISO2GOD only works with official Xbox360 HDDs. In order to run games from an external HDD, extract the ISO into a folder and copy the folder over to the external HDD. Then run the game either using XeXMenu or FSD.2. Your HDD says 16GB, because the Xbox360 can only format upto 16GB of space for its own use on an external USB device.
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The rest of the space will remain in its original consition.3. Even if you use XeXMenu or FSD, they won't be able to run a game using its ISO. First extract the ISO onto the USB HDD, then access it from either XeXMenu or FSD.4. You cannot copy a single file of more than 4GB in size onto a USB HDD formatted to FAT32.
But probably because you're copying a whole ISO file consisting of more than 4GB in size, the computer is giving you the memory error.