I got today my arduino FIO and tried it with XBEE series1 powered from USB. Problem was 3v3 voltage drop to 2.99V. Sound familiar? If you have this same problem add a capacitor to 3v3. I tried a small 220uF but it wasnt enough. 1000uF cap did the trick and its now working as it should!

your Arduino FIO has power issues with XBEE? - solution add a cap.

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