There are some USB drives that are low power that will work but they are few and far between. Also, you can plug in a powered USB hub and usually read drives thru it. Even if you find a drive or use a hub, your still limited without a file browser. If your device is jailbroken, you can use iFile which works well.
I really don't understand why Apple doesn't consider transfering files from a USB drive a common enough use case to support it. I've been to MANY computer conferences etc. where slides etc. are distributed on USB drives. Another situation I've run into is that I'm part of a camera club and I do the photo critiques. Members bring their photos on USB drives. I would love to be able to collect all the images on my iPad and use it for the slide show but alas, no joy. I still have to use my laptop.
With every iOS release, I keep my fingers crossed that this functionality will be included. I wonder if Apple will open up a little bit more under Tim.