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Sometimes while using your USB camera and USB memory stick, your Windows XP SP2 PC may suddenly give you the error message: 'USB Device Malfunctioned' and ask you to disconnect and plug it in again. However, this fix doesn't always work.
Try this solution instead. In Device Manager, expand Universal Serial Bus Controllers and right-click the first 'USB Root Hub' and select 'Properties.' On the 'Advanced' tab, unselect 'Allow computer to disable this to save power.' Repeat for all USB hubs. This fixed the problem on my PC.