The USB spec restricts low speed (1.5Mbps) devices to 100Hz polling rate. They are not permitted, per the words of the spec, to ask for anything higher, though there's nothing technically stopping them from doing so. For HID devices, Windows "upgrades" them to 125Hz, since 100Hz is lacking in many uses such as gaming, regardless of what they ask for. Linux seems to do something similar.
What these hacks do is cause Windows to "upgrade" things even more for low speed devices. Some poorly done versions of the hack also apply themselves to full speed devices which can actually cause such devices to be slowed down!
The USB specification does not restrict full speed (12Mbps) devices. They are permitted to request any polling rate that is an integer divisor of 1000Hz (they actually specify the polling PERIOD in milliseconds) in their descriptor. Windows seems to respect the devices wishes. I've asked for 1000Hz before, and Windows complies. Modern Linux kernels also comply fully, but some older ones max out at 500Hz or sometimes some weird number like 800Hz.
Usually, 250Hz is more than sufficient even for the most picky of gamers. Most games only poll button and joystick inputs once per (60Hz) frame, anyway. However, on device that report relative movement, such as mice and trackballs, one has to worry about the relative motion counter overflowing (which causes backspin). To counter this overflow, one can do two things: increase the polling rate (resetting the counter more frequently so it doesn't have a chance to overflow) or making the counter bigger (so that it takes longer to overflow)
Note that both low speed and full speed are part of the USB 1.1 specification. A USB 2.0 device can also be low speed or full speed. "Full speed" always refers to 12Mbps, NEVER to the 480Mbps "high speed" introduced in USB 2.0, even if a device is USB 2.0 compliant.
High speed (480Mbps) devices, which must be USB 2.0, can request much faster polling rates as they request their polling rates in units of 125microseconds. Very very few HID devices are high speed. Usually only composite devices with some other function (such as a mouse with integrated flash storage or something similarly weird) in addition to the HID would be high speed. I'm not aware of any commercially available "arcade IO" devices on the market that are high speed, and it's generally unnecessary.
Note that high speed devices are supposed to degrade gracefully to full speed if at all possible. Most do (e.g. storage devices get slower, cameras use lower framerates, etc.).
Also note that high speed is faster than full speed. Put another way, full speed is slower than high speed. Yes, it's totally unintuitive, but welcome to the world of a hardware standard written by Microsoft and a software standard written by Intel...all while doing who knows what drug(s).