At the office we had many USB issues that were cleared up in SP2. For instance we couldn't run CHKDSK on USB 2.0 drives until we installed SP2.
However if you feel the maker should support XP SP1 be sure to call them on that and make it a basis to return the product.
In closing I don't use their software but SYNCBACK.
When I click the Start Backup button, Maxtor displays a "Backup Progress" message in the application window and then hangs for hours without copying any of the data. I was able to verify through Windows Explorer and Disk Management that I'm connected (via USB) to this external device. I'm running XP with SP1 on Dell laptop.
Any help is much appreciated. Thanks!