XP Mode is aimed at businesses, therefor XP Mode is not intended for games. But for older applications.
Remember you have two Operating Systems running, so if Windows 7 sees the device that does not mean Windows XP will.
One thing to try in the Virtual PC where Windows XP is running click on the tab USB, (At the Top) and see if that device is listed in there..if it is click it and see if you can run it that way. Again XP mode is not intended for games..
If not then you can try running it in Windows 7 (Did you try compatibility mode?)
How old is the software?
Hope this Helps,