I have attempted to connect my Nook tablet to three different PCs running Windows XP. On two of them, I have only been able to transfer files over the supplied USB cable when I boot Windows XP into Safe Mode. When using Windows normally on those two systems I cannot manage files on my Nook at all. At no point do I receive an error message of any sort on either Windows or the Nook, and I actually see the "USB Mode" dialog box on my Nook encouraging me to begin transfering files.
One of those two PCs is running Windows XP Home, the other is running Windows XP Media Center Edition. On both of them, while viewing My Computer or any other Explorer window I never see a drive letter assigned to MyNook nor to the MicroSD card while using the PC normally. Under Safe Mode, drive letters are assigned immediately after I connect the USB cable. I am also able to eject the Nook properly under Safe Mode, while I am unable to do so after starting Windows normally (though the Media Center Edition PC does show the assigned drive letters on the Safely Remove Hardware system tray icon's context menu).
I have tried to use the Command Prompt to manage my files after starting Windows normally, with different results for each system. On the one running Media Center Edition, the cursor simply moves to the next line and never gives me a new prompt to type at. Certain parts of the GUI become unresponsive, yet when I look at the Task Manager, my CPU utilization is generally no more than 2%. For the XP Home PC, it simply returns "the system cannot find the drive specified." For both, I cannot even shut down Windows completely without pressing and holding the power button (they get stuck on the "Windows is shutting down..." screen).
The third Windows XP machine I tried connecting to belonged to a relative I was visiting. No problems experienced at all with that one.
Suggest you Google using the search term shown below (without the quotes). There are quite a number of web articles which address various causes of this problem, especially so it seems, in WIN XP.
"my computer does not recognize USB device"