Using USB causes my system to hang!!!

I'm really hoping that someone out there can help!

I've got a Packard Bell iXtreme 9100 i.
P3 800MHz
384Mb RAM

I've just upgraded the OS from ME to XP SP1. Everything works fine except that when plugging in a USB device the system hangs. The only thing left is to power down and reboot, forcing ScanDisk.

The strange thing is that if you leave the USB device plugged in while you reboot, the system boots to Windows and detects the USB device, which then works fine.

I've tried 3 different USB pen drives, a USB modem and 2 printers. All react the same. If someone has experienced this themselves I would love to know if and how you solved it! I've spent the best part of 48 hours with nothing to show for it!!!!!!

Did you try updaing the motherboard usb drivers i.e. if its a via chipset then this link should elicite them?