There is another thread about this topic here, http://forum.chumby.com/viewtopic.php?id=2617. I also suggest the Sony Micro Vault available up to 4GB. I have one for each of my Chumbies. They are small enough that I would not want to use them for anything but a fixed application as I know I would loose them.

I bought one of these:

http://www.supermediastore.com/pqi-i810 … -gary.html

It works, but I've had trouble getting it to work properly in linux.  I get errors about it not accepting an address.  With a little research it has to do with some USB initializations.  Basically the device is made for an incorrect USB implementation in windows and certain versions of the linux kernel don't work properly without setting it to "use old mode first" which only works sometimes.  On my linux desktop machine I have an initialization script run the following command:

echo Y > /sys/module/usbcore/parameters/old_scheme_first

I have also added this at initialization to the chumby with limited success.  The thing I've found that works the best is (believe it or not) not plugging in the drive all the way.  I leave it about 1/8" from all the way in.  The pin-out on the USB connector seems strange, but I figured this one out because it worked fine (no kernel parameter changes) with a USB extension cable but not with the USB drive plugged directly into a linux machine or chumby.