Update: You can connect USB drive to Nexus 7 without rooting also. Check it out.
Google Nexus 7 comes with 8GB & 16GB internal memory. It does not have microSD card slot to expand the storage. For many people, microSD card slot is important. You might be even thinking of not buying Nexus 7 because it does not have microSD card slot.
It would be good to have microSD card built in. But it is not hard to connect Nexus 7 to USB flash drive or external hard disk.
How to connect Nexus 7 to USB flash drive
Nexus 7 has USB OTG (On The Go) feature. This allows Nexus 7 to connect to USB Thumbdrive. You don’t need to worry about not having microSD slot. You need USB OTG adapter cable to connect Nexus 7 to USB flashdrive. You can even connect to your camera, camcorder etc if you have usb otg cable.
USB OTG Adapter Cable is available for about $1 from Amazon. Your Nexus 7 tablet acts as USB host so that you can browse through the usb flash drive.
It is easy to root Nexus 7 with Nexus Tool Kit. You don’t root Nexus 7 if you are using it connect mouse, keyboard etc.
Also, This USB OTG adapter cables works with Samsung Galaxy Nexus, Samsung GT-i9100, Galaxy S2, Galaxy Note etc. If you have usb adapter already with one of these phones, you can try that instead of buying usb adapter cable again.
You don’t need to think about storage with Nexus 7 now. You can watch movies, photos directly from USB drive or hard disk etc. | ref