After using the Devices > USB > External HDD menu option while my Win XP Pro VM was running OS X spit out the 'a device has been disconnected without being ejected' error* and then nothing. Now neither the Windows VM or OS X will recognize my usb hard drive. It works with other Windows computers without a hitch. But I can no longer access it with OS X even. I have tried rebooting to no avail. I searched through the forums here and couldn't find any similar problems. It's mostly people trying to get their drive to work in Windows. *I'm assuming that was the error that was posted. I thought I recognized it right away and that it was just because Parallels disconnected it without ejecting to have it connect to the VM. So, thinking that I knew what it was, as it looked the same, I just closed it right away.
Are you aware that USB devices are supposed to be ejected in Windows XP before you eject them in parallels? Ejecting a unit improperly may cause unexpected behavior such as yours. My advice: Back up the data on the USB device and then format it if possible. Mac OS may be more sensitive to bad media than a Windows pc. Hope this helps.
Actually, what the problem was that Parallels disconnected (improperly ejected) my USB drive from OS X to connect it to Windows. I had actually never connected it to my Windows VM before. So, basically, Parallels forced my drive to disconnect when it should not have and so my drive was damaged. I had to run through repairs (chkdsk) on a Windows box to get it to be recognized by OS X again. So, I guess this is solved. I'm just not in a hurry to connect my drive to a PVM any time soon.
That is a great reason to make sure that "USB Autoconnect" is turned off. When mine was on, I would find that my DVD drive was always attached to the opposite machine than where I wanted it. It is better to do this manually.