The XEX version needs to be launched from something else e.g. On boot using Dashlaunch or from another app such as FSD. The ISO version can be burned to disc, very handy for getting stuff on a new hard drive if you have no way of connecting the hard drive to the PC. Hope that explains a bit better what each version is and why you might want it. Well, every time I plug in a newly bought USB or and old one, I can see the USB is shown as USB Storage Device with the amount of free space left on it. No configure device option. I can still access it like an hard drive but no configure option.
When I choose device option I can only see 'rename ', 'format ', 'clear system cache ' and 'transfer content '. But if I turned off the console and remove the hard drive, I can make the USB the system drive. But still not working because of some weird stuffs like my USB is 2Gb before making it system drive and after making it system drive, I plug the USB into my PC and try to inject Xex menu. But after plugging it back in the console, the USB is shown as 'Unformatted '. And by formatting it, it just come back to the first time I plug it in. No configure device option.