It does sound like it could be an odd incompatibility with the drive, or a miscommunication between devices. It's really hard to determine.
Is it possible to take your USB drive to the store and try the same test on the store's unit to see if you have the same reaction? That may indicate if the problem is universal, and if a replacement would solve the issue.
I'll check into the firmware instructions if you can tell me which country you're inquiring from, or better, post a link to the product page you're referring to. If not, I can post some instructions for you to use that will get the job done.
TV - PS50C550
I can load and play movies from a USB key in the side USB input (labelled USB HDD), they play fine (mix of mkv/avi/mp4 1080, 720) and look stunning, but when I press Stop, or Return, the Media Play menu shakes badly and has lines running through it.
If I then play another video file, the video plays fine, but the same problem is there when returning to the menu.
This is resolved by either turning the TV off/on, or changing the TV to the scart input.
I only got this TV yesterday, so I'm wondering if it's a bug with Media Play, or if I have a faulty TV (in which case I need to return it asap for a replacement)
On a side note, I noticed there is a Firmware update on the Samsung site (T-TDT5DEUC-1012.1), but I can't find any release notes or installation instructions.