Tested: WORKING
Model: WL-500W
Firmware: 1.9.2.7-d-r1222 (from wl500g project at Google Code)

Tested: NOT WORKING
Model: WL-500W
Firmware: 1.9.2.7-10

Device
Brandname: Kingston
Brandtype: Kingston Data Traveler 102 (DT102/16GB)
Memory: 16GB
USB Interface: USB 2.0 compliant
URL To manufacturer: http://www.kingston.com/
URL To product: http://www.kingston.com/flash/dt102.asp

Notes:
Does not work with Oleg's firmware 1.9.2.7-10; there I get "I/O error: dev 08:00, sector 0" and the device is unusable. It works perfectly with WL500W-1.9.2.7-d-r1222. Mke2fs was very slow, but overall performance is fine.

I'm using ext2 instead of ext3 because various sources say the journal writes in ext3 wear out flash more. The firmware doesn't include ext2fs support; the module is found in the modules file which is listed on the firmware download page. I put the module (ext2.o) in flashfs. I load it and mount the filesystem from /tmp/local/sbin/post-boot