When not logged in as Administrator, XP Windows pops up admin login dialog box everytime a new USB flash memory drive is plugged in.
1. I replaced corrupted drivers (usbstor.inf, usbstor.pnf, usbstor.sys), doesn't seem to do anything. (I didn't restart)
2. I allowed user permission using a downloadable tool: Allow Users to Install USB Jump Drives. I restarted.
Problem solved. Looks like restart is crucial in this fix.