Link: http://support.microsoft.com/kb/927797
When you use a universal serial bus (USB-based tape drive as a backup device on a computer that is running Microsoft SQL Server 2000 or Microsoft SQL Server 2005, you cannot specify the USB-based tape drive as a backup device in SQL Enterprise Manager or in SQL Server Management Studio.
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I was able to specify a USB drive as a backup device following the instruction i found here: http://www.thepcnetworkpros.com/it-information/using-backup-devices-in-sql-server
I am sure you can a USB tape drive isn’t that different.