Just to join the chorus, I too was afflicted with this problem. This is the only place where I have found anything really useful. Thank you all!
Using a dell x300 (with media base), I had a logitech usb headset and a flash drive that didn't work. They would show up as "other devices", windows would not find drivers, blablablabla. Interestingly, I did have an older flash drive that did work, a DCS camera, a Creative MP3 player. Granted for the player, I did install software.
I was almost at the point of doing an OS reinstall of some sort, but really didn't want to (I got the laptop used and could not reload some of the cool apps if they went away). I knew that these two devices worked on another computer, so I copied the c:\windows\inf folder from that computer onto a cd. on the dell, I created a new folder, c:\window\inf_bak, and moved the contents of c:\windows\inf to that folder. I deleted everything in c:\windows\inf and moved the other computer's folder contents to that folder. I can't remember if it required a restart to make it all go, but everything now works! no problems. I did have to direct device manager to find the drivers for the flash drive, but the headset started with no prompting.
three things
1) I left the cd with the new inf folder in the drive and It seemed that the CD was searched for the drivers for the flash drive.
2) I don't know if I needed to, but I did the above file transfers in safe mode from the command prompt. I went this route because I couldn't delete the inf folder (makes sense). I may have been able to do this from windows, but I didn't. I am believing that if you are here, you probably know a bit of something so you'll probably figure it out.
3) I do own a copy of winXP, but I chose not to copy files from there as the files in the "inf" folder were called "<filename>.in_". Didn't want to try to make those work though they may have.
I did a test and restarted the computer without the cd in it and both devices restarted with zero prompting. I am very happy now. I could have worked around the issue, but I really didn't think I needed to. Thank you everyone for the tips and tricks!