Unable to check USB devices in Removable Devices list.

I recently inherited a project which uses Ubuntu 7.10 inside VMWare Server v. 1.0.4. I need to access a USB stick from Ubuntu, but are having a hard time doing so:

1. I insert the USB drive into my Windows7 machine

2. I start VMWare Server

3. I start the Ubuntu instance

4. I try to select the USB drive from "VM" -> "Removable Devices" -> "USB Devices"

Although there is no error message, the USB drive does not become checked. Also, when I run "cat /proc/partitions" I do not see the drive. I installed the VMWare tools, but no luck there either.

Open to any and all suggestions.