In my experience with Max Drive - the file isn't "recognizable". I still put it on the memory stick and it transfers just fine.
I don't know why your computer doesn't "recognize" the USB stick. Have you clicked on "my computer"? It should be listed under that - for me it's G:. Then you open that window, drag and drop in the file (still unrecognized). Take it to the PS2 - put in the disc (for the PS2) - start it up, insert the stick into the PS2, select the stick, select the file, then select UNCRUSH (I forgot this the first couple times) to whichever memory card you want.
Then you're set. Good luck.