i assure you it is not a fake memory stick. the problem is almost certainly a plugin. i tried it on three seperate mem sticks, 2 4 gigs, with identical files (one sony one sandisk) and one 128 meg.
the only difference of the smaller one is the absence of the game categories plugin.

could game categories be the problem on the larger mem sticks?

no i have game catagories on and a 4 gig sandisk try hle as i mentioned earlier its in the settings before you launch a game

It isn't game categories plugin but you could still try disabling all your plugins.