Take it back to the shop and let them sort it out with Trust Chalky, if they get snotty quote the Sale of Goods Act 1979.
Get your money back.

Hey chalkbear, and welcome to the forums
Before you take it back, you might try this. Since youre having trouble with all usb devices, go to device manager, scroll down to Universal Serial Bus Controllers, expand it, right click on all of your usb devices and in the menu that pops up select >uninstall, click ok on the warning. Reboot and windows will redetect and install the devices and drivers. Sometimes a driver will become corrupt and device manager will lie to you, and this will sometimes fix it.

EDIT: Also , you might want to check your bios to make sure usb support is enabled. It should show up in device manager as disabled if it isnt, but it wont hurt to check.

thanks - however what has happened..upon rebooting ater unsinstalling the USB devices, windows did not redetect or install them- leading me to think that my copy of windows doesnt have or cant find any drivers at all?

If this is an OEM version Chalky then I'll ask did you get any other disks with the system when you bought it?
Usually on OEM's you can get up to 3 disks.
1) OS installation disk
2) System drivers disk, ie Mobo, graphics etc
3) A "Read Me" PC manual disk

yeah i have my XP home edition disk...which i've tried to put in when the installation wizard asks for a CD, and also tried this approach with a CD that says 'drivers and user guides' and also the CD that correponds to the motherboard drivers - but still nothing!

p.s. i really appreciate you guys helping me out here!

You will have to set the the first boot priority as the cdrom drove Chalky in the bios, then pop your xp cd in and choose to repair the existing installation.