Looks like Timm[ie] has beaten out the rest of my technical readers (are there any??? Edit: Hi Zach!) and came up with the flaw in Part 1. Flash drives come formatted as FAT32, which is aptly named, since it is a 32 bit file system, which limits files to 4GB.
Splitting the file wasn't a good option because they're FedExing it to the other company, so not requiring them to have to try and piece the file back together is a plus, but in the end might be what they do. Just doesn't gain much on just using a stack of DVDs.
I was able to see the 32 bit problem right away, but when it came to solutions, the engineers and I diverged. Since the file system rolls over and dies after 4GB, what's the next thing to try? We're not sure if they're going to have a *NIX box to plug it into, so bonus points for thinking of a solution that is OS independent, but if it's Unix only, I'll still give you credit.