Thanks for the above solutions guys! But they are not working!

Luckily, I read at one of the post which says delete the INFCACHE.1 file from windows\inf folder.

This has worked!!!

I will post this solution on all the numerous posts I have looked upon!

Problem:
Windows XP does not recognize USB Mass Storage Devices
Device is detected and listed with an exclaimation mark in Device Manager

Solution:
After spending hours on internet and reading through numerous posts, I found following solutions which will definately work:

1. Delete following file: windows\inf\infcache.1

2. Go to windows\inf folder and see if you have read/write permissions for following files:
usbstor.inf
usbstor.pnf
If not, open security settings for above files and add your username for read/write access.

3. Open registry editor and:
Delete following keys:
HKLM\System\CurrentControlSet\Enum\USB\ <read all keys and delete all those saying USB Mass Storage Driver>

Add following key:
HKLM\Local_Machine\CurrentControlSet\Services\Usb
Add a new DWoRD Value and name it "DisableSelectiveSuspend". Give it value 1

4. Make sure you have USBSTOR.SYS file in your windows\system32\drivers folder (It wasn't there in my case). Just Google using Usbstor.sys and you will find the file to download. Save it at above location.

After doing above steps, restart your PC. Now Windows should recognize your mass storage and should do an autoplay.

5. Some posts also mention that turning off the system and pulling out mains power supply and batteries for 30 mins is also helpful to resolve above problem.

edited by admin: no contact info per minute on the forum, thank you