I plug in a flash disk into USB port and nothing happens. So I went into Disk Management (Control Panel/Administrative Tools/Computer Management/Disk Management) and it showed no disks at all - just "CD-ROM 0 - DVD - No Media". There is not a single hard disk such as Disk 0 - but obviously that exists as I booted from it.
The system is a Compaq Presario 2200 running XP SP2.
I am pretty sure this is not a hardware problem as it happens with several USB drives in both USB slots. Also a USB mouse in the same slots works fine. Also if I boot from UBCD (Ultimate Boot CD) disk I *can* see USB drives.
It appears that there is some corruption in XP and it is not finding or reporting drives correctly.
I have checked that no system files are corrupt (dmserver.dll etc) and scanned for viruses etc. The system did have Alureon.BF and Aluroen.gen!C spyware which I have removed. I suspect there were other viruses on it at some time (not my computer) but it does have Avira anti-virus (and AVG).
I have tried adjusting the registry settings associated with dmserver.dll to no avail. I suspect the problem is from lower-level software in XP that keeps track of physical hard disks (as opposed to other types of devices like optical disks), but I have no idea what that is or how to fix it.