Is there a way to use my iOS 8 device as USB Mass Storage Device for Windows I want to download a file to my iOS device, connect it to my windows xp computer as a USB Mass Storage Device and transfer it.
You can download files on your iPhone from computer by moving into some app's directory in iTunes. There are a lot of apps with such functionality. For example USB Disk. But in order to access the files on another computer iTunes must be installed also. Without it the only things you can view are photos and videos.

There are also apps that set up a local file server which can be accessed  wirelessly from any device in the same network just by typing iPhone's ip in the browser. Like this one.

Connection of iPhone as flash drive requires access to iPhone system directories which is achievable only through jailbreak.