USB (and IEEE - Firewire) devices won't work on XP mode - especially if the Native USB device doesn't work on Windows 7.
You need to install a fully blown NON XP mode virtual machine - suggest VBOX or vmware player / server.
Then so long as Windows 7 supports "Generic USB devices" which it will do after you've installed the virtual machine software on the Host you can then attach ypur USB / Firewire devices to your GUEST. The Guest will then prompt for the USB driver
software which you can install.
Windows XP mode is too limited for this sort of stuff -- it only works for very simple basic legacy applications -- I wouldn't really recommend it at all actually.
The Idea was actually great but it's really hobbled and in any case XP mode won't work on Windows 7 Home premium.