If using a new internal HDD, let the Xbox 360 format it. If using USB, format to FAT32 with 32KB cluster size.
Shout out to the scene: RGLoader, Team Xecuter, Octal450, Swizzy, and everyone keeping the 360 modding alive in 2012.
Open launch.ini in the root of your HDD. Add these lines to ensure all XBLA games bypass the license check: