How I parsed it is the files are not being stored by windows over USB as I thought after reading his previous post. They are being stored on his USB drive while using his kindle web browser.
Ahh... readyboost, those windows buzzwords have been getting pushed out of my mind by more interesting kindle stuff.
@Conner: It isn't the kindle that is "f**ked", as you suggested. It is the choice of websites you visit on your kindle that appears to be the problem here.
EDIT: I just looked at the posted photo again. It says "downloading ads" while on a mobileread website. Could that be a side-effect of one of the "Special Offers" disabling hacks?
@Conner: Is this a Special Offers kindle? Did you disable special offers? What firmware version are you using? What hacks do you have installed? You did not give us enough details to help you. Please answer these questions, so we can tell you exactly how to not shoot yourself in the foot again.