I just updated my kernel from 2.6.38.8-pclos2 to 2.6.38.8-pclos3 and now the the usb problem is solved. Not sure if its because a new kernel got a chance to see all the hardware at the beginning, or because of this particular kernel. I could undo everything, and try with an older kernel but I am glad it is finally working. Guess the best solution was the easiest. Thanks for all the help.
Glad it work,
please edit your first post and mark it as SOLVED.
