I'm reading this and it's not very clear to me what you are doing exactly. Are you using an external hard disk on the USB port, or some other device? Which hard disk did you reformat as it's pointless formatting the main laptop C: drive to solve this problem. If you do not have an external hard driive on the USB port, have you tried other USB accessories (mouse/external keyboard or flash drive) to see if they work?
If you ARE using an external 2 1/2" USB powered hard disk then they are sometimes very erratic in behaviour. This is because of the laptop's power output which is insufficient to power the harddisk through a single USB port unless the hard disk has a seperate power adapter, OR you need a double USB adapter which uses TWO of your laptop USB ports which provides an increase in power for your external hard disk to work.
If this is not an external hard disk problem then make sure you have the latest Windows 7 updates installed as I seem to remember a USB issue with Windows 7 some months ago.
