When plugging in the device you will get a message in the bottom right (Near the clock), see if this is coming back with the following.
"There was an error installing the device" and something about firmware. I have seen this happen a lot at where I work and you have to pull the usb out, then plug in again and sometimes this takes about 10 attempts to get it working. It's a PITA. We are running xp sp3 on the machines.
We have found if you boot to safe mode, uninstall all the USB devices and then uninstall the USB Hubs themselves that when it reboots and detects it can resolve the issue.
You need to check that you have the right chipset drivers etc installed as well as making sure you are on the latest version of bios release