Hi Robie! I have the exact same problem on Vista Ultimate 32 bit. Also, I have a second 40 GB HDD whose 10GB Primary partition does not get recognised and goes into Unknown Devies category in device manager along with my USB drive. My USB drive and 40 GB HDD are getting recognised as devices but not installing themselves as Disks which is why we can't access them.
I am looking at a potential solution as i'm writing this at this forum:
USB Drive Problems with Vista - TechNet Forums
Will write back with updates. Its pretty annoying since I have my project du dates coming up and I cant read my USB drive :-E