The first image is just there to say it works and OSX is happy
In the second image i've ejected from OSX and mounted it into Fusion.
I've tried using two sticks-
Laser 1GB: works on OSX and XP, invisible in Fusion
IBM 128MB: works on OSX XP and
use to work in Fusion (for some reason it no longer works)
As for Device Manager, there is an exclamation mark next to USB. I figured this was tolerable since the Device Manager on my real XP displays the same thing.
This problem is virtual machine specific, all sticks work fine in the real world and all use FAT32.
I've tried restarting the virtual machine. Also tried disconnect/reconnect. Normally when you plug in a USB, Windows will show a pop-up saying mass storage device detected. This does not happen in Fusion, on my MacBook.
here is another screenshot showing all is fine in the real world, XP:
