I wanted to use a SD card for BD-Live storage, I tried two cards: Sandisk 2GB and Kingston 1GB, both formatted as FAT32.
When I change the storage from USB to SD card in the menu I am instructed that proceeding will restart the player, I press OK, it restarts.
When I enter the menu again to check (after the restart) I can see that USB is still active, not the SD Card.

Another bug in 3.53 or what?

I tried FAT16 - no luck, either.