I checked the USB flash memory out on another computer running XP (same system as me) and it works OK, both for exploring contents and allowed the files to be copied to DVDs. So I will have the computer apart for the obvious faults assuming it could be damge to the connections to the ports.
Already been into BIOS, device manager, and that says everything is running just fine. We have a day of total silence on 16th (and New Year Saka 1932) so it will help the time go by looking at it then.
If that idea doesn't work I may have a few beers instead.
Any hints of what could help fix the problem always most welcome.