"USB Device Not recognized" error keeps popping up and USB devices do not work

So first turn off your computer using Shut Down or pressing the power button and then UNPLUG it from the wall outlet. Let it sit for about a minute and then plug it back in. Hope this helps someone fix that highly irritating “USB device not recognized” Windows error!

@johnkelly46 -- thanks for the suggestion and for sharing the phenomenon underlying the problem. after following your procedure, the 'USB device not recognized' message has gone away on my HP pavilion laptop with Windows Vista Home Premium 64-bit, but the 'Unknown Device' still exists under 'Universal Serial Bus controllers' in the 'Device Manager.' how should i fix that? i tried uninstalling, updating the driver, but nothing has worked so far.

what is this 'Unknown Device?' is it the power supply chip for USB you indicate?

Here's what I finally discovered after giving up on an answer that worked for me. I discovered this while installing a new internal hard drive:

I have Windows 7 64-bit Home Premium, if that would make a difference. Follow these instructions at your own risk. They worked perfectly for me, but you know how that doesn't mean they will work perfectly for you. Print these steps out before you try to perform any of them. Also, read over them to get an idea what you'll be doing. Also, do your own research if you have any questions about the information presented here.

1. Click on the start button.
2. Search for "disk" (without quotes).
3. Look for and click on "Create and format hard disk partitions". No, you aren't going to do either of those things -- this opens up the Disk Management window.
4. Before going any further, do not make any changes while in this window. Don't try to change any settings other than the column sizes as explained below.
5. Look for your USB drive(s) in the top pane of this window. To maximize the columns in that pane, you can do a Ctrl-+ (hold down the Ctrl key and press the plus on the keypad). This Ctrl-+ works in any window, by the way -- a great shortcut that saves manually resizing columns.
6. Look in the "Status" column for your USB drive(s).
7. Does that status include the word "Active?"
8. That was my problem, though no amount of internet searching told me that. Searching did tell me that "Active" means that the drive is a bootable drive. I do not boot from any of my USB drives, so I decided to remove the "Active" as the best info I found was that it didn't cause problems to remove it on non-bootable drives.
9. Problem is that you can add "Active" in the Disk Management window, but you cannot delete it :-(
10. The rest of this is not for the faint of heart -- if you don't do it correctly, you could cause yourself more problems than having your USB drive causes now.
11. Keep the Disk Management window open.
12. Open a command prompt by clicking Start. In the "Search programs and files" box at the bottom of the start menu, type "cmd" (no quotes). You'll see CMD.EXE appear at the top. Right click that and click on "Run as administrator." Click "Yes" that you want to run this program.
13. Type DISKPART (press Enter after each of the CAPITALIZED commands you type). That opens the disk partitioning program.
14. Type LIST DISK (& press Enter). This makes no changes to your system. It just lists your disks by system disk numbers. Notice that the numbers coincide with the disk numbers listed in the bottom pane of the Disk Management window. You will not have Disk Names to go by in the CMD window. That's where the Disk Management window can help you in finding the correct Disk Number. These numbers are extremely important to what you'll do next! BE CAREFUL! Double check what you type before you press Enter from now on! Also, don't do this if you cannot decide which disk number goes with your USB drive.
15. Chances are your USB drive(s) is/are the higher numbered drive(s).
16. If you have more than one USB disk that's marked ACTIVE, you'll work on just one at a time.
17. Now type SELECT DISK n (where n is the disk number you know is the USB drive you want to delete ACTIVE on). You've still made no changes to your system.
18. Type LIST PARTITION. Chances are there's only one partition. If you do have more than one, again chances are only one is marked as ACTIVE. You've still not made a change to your system.
19. Type SELECT PARTITION n (where n is the number of the ACTIVE partition you want to make inactive). You've still not made a change to your system.
20. HERE'S where you WILL make a change to your system. Only if you've been very careful so far and are SURE you've chosen the correct disk drive and partition, type INACTIVE and press Enter.
21. Look in the Disk Management window for this drive, and you should see that ACTIVE is no longer listed in the Status column for the USB drive.
22. If you have another USB drive to unmark as ACTIVE, go back to step 14 and repeat for that drive number/partition.
23. Type EXIT to exit DISKPART.
24. Type EXIT again to close the CMD window.
25. Reboot and see if your USB drive(s) show(s) up.

If by chance you want to reverse what you've done here, it's much simpler. Find your USB drive in the Disk Management window -- this time in the bottom pane. Right click in the second column that lists the drive LETTER, size, status and partition(s). If there's more than one partition, click on the one to the left. After right clicking, click on MARK PARTITION AS ACTIVE. That's it!

After getting rid of ACTIVE on my three USB drives, I can put Windows 7 in Sleep mode and when I wake it up, my USB drives all show up as they should :-) I also no longer get "USB device not recognized." And no more "Do you wish to format drive X?" WONDERFUL! Life is better :-)