Thanks: I did a image capture of the picture, displayed it, then zoomed in three or four times and sure enough, that is a USB symbol.
Documenting screen-driven systems is difficult. The black bar is at the bottom. On the extreme left side of the bar is the journal activity symbol. To the right of that symbol is the USB symbol. That is what i meant to indicate.
When i get a USB drive the XO can read i will try those other things. As i previously speculated, the disk utility supplied with Mac OS (Leopard) seems to be unable to do a simple "hard format". After i format, even with MS-DOS specified, the disk shows a main folder that identifies as OS X extended, then a sub-folder shows the MS-DOS. Obviously that is a structure that the XO cannot accept. It does this even when i specify one partition then MS-DOS.
If what i just said is entirely true, i should probably "publish" it in the WIKI or perhaps "It's Working, Not Working".
That is one of the problems with this highly structured forum. This conversation may never be seen by someone who would be interested.