Memory card / Storage Problems on 360

I recently got an Arcade 360, and it had 2 memory cards... unfortunately am having problems since my console seems to only recognise 1 memory card (the one I have have system/save files on).. have anyone else encountered the same problem or it could be that i got a faulty memory card??

I also have problems getting the 360 to recognise the 4GB portable Hard Drive I got with the console... (can this be used as a storage medium for save files or downloads ? )

thanks for your help...

PS. (am thinking about getting an external HD, probably its better...)