toby10 wrote: 
> Yes and Yes.  ;)
> 
> But it is best to initially connect Touch to the internet so you get the
> latest firmware update the easiest way.
> Also, you will be running a server regardless.  When using the USB you
> will simply be using the Touch's inbuilt (albeit limited) server.

and here's some best practices from a prior Toby10 post that are
useful:

http://forums.slimdevices.com/showthread.php?93845-USB-External-Hard-Drive-Library-for-Touch&p=692825&viewfull=1#post692825


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