Make sure you install the SOFTware before the HARDware, and be sure it's the latest release. I had the same sounding problem with an Olympus SM card reader. Uninstalling the hardware through the device manager, then removing the software and rebooting solved the problem. There is also a USB fix from Micro$oft for Win98 machines, so a visit to windowsupdate.com would be advisable.
As USB 2.0 is fully backwards compatible with USB 1.0 & 1.1, there shouldn't be any problems with using non-USB2.0 hardware with such adapters.
Hope you get it sorted.