I use USB host on my Android devices a lot. Whenever you see an Android screencast or a real life video on the site, it has made the journey to my computer though a USB flash drive – or specifically a USB card reader and a fast SD card. A bug that I constantly have to deal with however is that after few connects/disconnects, my Android tablet starts complaining that anything I insert is damaged. It thinks any external media is an SD card to begin with, so the warning specifically says “Damaged SD card. You may have to reformat it”.
This warning might sound like doomsday has arrived for your USB media, but it probably hasn’t. A quick reboot has fixed it every single time for me, and it keeps doing it to the point where I could reproduce the issue in 20 seconds for the screenshot above by simply plugging and unplugging something repeatedly. It seems to happen quicker if you don’t eject the USB device properly, but trust me, even doing it the right way will leave you staring at this message at times. I don’t know how wide spread the issue is and what devices and software versions it affects, but in any case, if you do get this message, just try a reboot and see what happens.