I have the same netbook LG X110 and encounter the same problem.
Booting from USB device fails most of the time. Same usb device works fine on a 
Lenovo T60.
Hotplug does not work at all. No logs are written if I plug an usb device.
Kernel 2.6.31-14-generic. 
Any solution yet?

Best Regards Stefan

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Intel USB Hardware does not work with newer Kernel anymore
https://bugs.launchpad.net/bugs/457580
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