I've been having the same problem with a Laptop of a client that has been running with no problem. Suddenly it will not install the USB Root Hub drivers. In fact everything as ld13 described. I feel with you mate.
I don't have a solution but I am astounded a the amount of jackass advice that this problem seems to generate.
ld13 has spotted it properly and it is a Windows permissions problem. In my case the culprit is a fully legal Windows 7 Home Basic.
This has nothing to do with BIOS settings, with trying another device or with the Windows being downloaded from anywhere. I've been struggling with this problem for a week now and I see this kind on non-advice popping up on all kinds of forums together with the usual "reload Windows" guff. It's verbal fluff, not help. I just spent 5 minutes reading a thread on a forum where the theory for this issue was that the motherboard was the wrong one. Geez. Don't people think any more?
ld13 all I can tell you is this
I suspect that trouble is caused by a virus/malware or a buggy program/update. Trying to guess which permission is the culprit if all the obvious ones seem correct is almost impossible. In Home Basic there is no access to the Local Security Policy Editor. If you are able to access this tool you can at least check the permissions.
The other thing that nobody seems mention. Probably because it is unlikely but not impossible, is that the USB controller is blown. Easy enough to test, boot with a Windows PE or Linux bootable and plug in a USB drive.
Or you could always do what the hack mechanics do and RELOAD WINDOWS!