Sam
The example shows how a PC host can use the on-chip-flash as a small disk drive. The application on the Kinetis will not be able to access this file system in the same way and also the PC host is not synchronised to the Kinetis application in this mode (that is, the PC host will not know if the Kinetis application changes data in Flash) but this is useful for retrieving data that may have been saved during normal application operation or for making parameter changes (when the Kinetis application is not running)..
The same is possible on an SD card, which of course has much more space.
The uTasker project includes this as standard, allowing USB-MSD to operate on the SD card. Using the utFAT it also allows the application to read and write the SD card. Its web server can server data from the SD card and also transferscan be made to and from the SD card using the FTP server. See the following for more details:
http://www.utasker.com/docs/uTasker/uTasker_utFAT.PDF
http://www.utasker.com/docs/uTasker/USB_User_Guide.PDF
I addition, it allows software updates to be made using the USB-MSD interface or from the SD card:
http://www.utasker.com/docs/uTasker/uTaskerSerialLoader.PDF
Regards
Mark