If you keep disconnecting and reconnecting a USB device then Parallels starts to say you can't connect devices because there are already too many connected. It keeps saying this even if you have no USB devices attached. Suspending the virtual machine and starting it up again works as a temporary fix.
Same issue I get the same problem. Claims the device is already in use. I am trying to connect an Orion StarShoot USB camera. Note that the external keyboar and mouse work fine. I have tried bootign the vm without anything connected and then connect the camera, but I get the same result