The site I found out about WHS from had a bit of info that might be helpful. I'm not on the computer i found the info on, so I can't link it atm, but it said no USB 1.x support on WHS.
Now, I can't vouch that its true, but thats what I read.
NO, USB 1.1 devices will work with WHS: you probably installed using a USB keyboard or mouse.
However, USB 1.1 mass storage devices will slow Drive Extender to a crawl. So using USB 1.1 drives is an "unsupported" scenario, in that Microsoft neither tests nor tries to accommodate the scenario.