You might have damaged USB drivers in your OS. While a "restore" might help, I would suggest doing a Windows Repair with the XP CD at startup to resolve this.
This will NOT delete your personal files or tamper with your installed applications. It will however repair your OS core files. You may need to install SP2 again if the CD does not currently have it.
Here is a great step-by-step guide. If you decide to do this, be VERY careful and just follow the directions screen-by-screen.
http://www.windowsxpprofessional.windowsreinstall.com/installxpcdrepair/indexfullpage.htm