No problem. Definitely, you’re gonna have some people not quite understand what to do with USB cards. But for me, the HD video file far outweighs a DVD with nice packaging but a garbage SD image.
As for the user experience, I shipped them pretty plainly, to keep the weight under 1 oz (so I could ship it with a postage stamp); they received the USB card — which looks like this http://multiplex10.bigcartel.com/product/multiplex-10-the-animated-short-usb-card — in a rigid mailer.
They fold out the… erm, prong. Spindle? Whatever it’s called. The thing that plugs into the port, and it mounts like any thumb drive. It’s a Windows-formatted drive but Macs can read them (I’m a Mac user); it just has the default icon because I’m not aware of any cross-platform way to make them. The video file was literally the only file on the drive, so the M4V/MOV video file is preeeeeeettttty easy to find. I did consider adding some other files — like soundtrack MP3s or PDFs of the script — to a folder and calling it a “special edition.” I think as long as the video file is the ONLY file at the root level, you’re not going to confuse people.
(You could theoretically put an HTML file at the root level and have that be an interface for your USB drive, with all the other files tucked away in folders, but I wanted to keep it simple.)
Users double-click the video file, and it plays in their default video player (or they copy it into whatever video library they want, since it’s a DRM-free file — or delete it and just use it as a thumb drive if they want).
You COULD set it to autorun the video on insert, but that only works on Windows, adds a bunch of extra files (which I suppose you could set to “hidden”), and I think it’s kind of user hostile to assume that’s what they want to do.