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Not only FAT32, but the drive must be 32 GB or less.
It also won't read "superfloppy" initialized drives, where the entire drive is FAT32. Some companies deliver their thumbdrives that way, because they get slightly more room on them. If so, reformat it so it gets an MSDOS bootblock and the first partition becomes FAT32. (That's the default if you reformat it in Windows.)
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