I bought a data transfer kit from Microsoft so I could transfer data from my old 120 GB Hard disk to my new 250 Gb hard drive from a new Xbox 360 S. When I plug the old HDD into the transfer kit and plug the other and to my new xbox 360 I don't get the notification that a transfer cable was found. When I go into the system settings of my xbox 360 s and check the memory, the old HDD isn't recognized as an old xbox 360 HDD. It says that the old HDD is a usb device, which should be configured before I can use it with my xbox 360. That would mean formatting the old HDD which has the data I'd like to transfer to the new HDD :S I checked google and found out more people are having this problem, but I can't find a solution anywhere. Does anyone have any idea what I could do?

Other than checking Xbox centric sites/forums, no. But when/if you find the solution you should share it here and elsewhere so others may have an easier time in the future. Good luck.

I called the xbox support. They gave me the answer that some cables can only be used once. Weird stuff. Anyhow, mine was indeed a second hand cable, so this might be the problem. I guess I need to transfer 100 gb with a 8 GB usb drive....

Yeah, i'm on my third 360.  First, I had a 20gb Pro and I sold it for a 60gb "Jasper" and some peace of mind.  I got my transfer cable and copied the 20gb's to the 60gb.  A lot of the videos and all of the installed games had to be deleted and re-downloaded since DRM prevented them from being copied.  This year, I got a 250gb 360s (two 360's now--one in the living room and one in my "game room"!).  I used the transfer cable to copy everything from the 60gb HDD to the 250gb HDD.  Again, none of the installs, DLC, and Arcade games worked.  A lot of the trailers didn't work, either.  I had to  redownload them (which took about three seconds each since the content was already on the HDD--it just had to unlock).  Then, I just used the 8gb USB to copy all of my Arcade games and all of my game saves to put back on the original 60 GB Xbox. I had around 50 Arcade games and probably 150 game saves.  They all fit onto the 8GB card (If I recall correctly).

Of course, I was going from an old system to a new system instead of just going from an old HDD to a new HDD.  I think it would be cool if you just copied your music, game saves and arcade games to the 8GB card since DLC, installs, movies, and such possibly won't work anyway and you'll have to re-download them.

For whatever reason, the DRM god smiled upon me.  Instead of having to be logged in on one system for all of my Arcade games to work, any games I had before were and still are 100% unlocked on both systems.  I did do a license transfer from my old console to my new console but the old console somehow retained its right to the old games!  Any games I bought since are tied to the console I bought them for and will only work on the other console if I'm logged into Xbox Live, though.

Long story short:  Just put you game saves and arcade games on the 8gb card.  It shouldn't take any time for you to select the ones you want to copy to that 8gb card (just check the boxes when you go to "settings" and "memory").  Then copy everything to the new HDD.  It won't take as long as you think.  Probably less than an hour for 8gb of data.

Wow that sucks, a transfer cable can only be used once, that sounds like such a scam.