I have had some usb go bad on me and did the same thing, but it can also be something in windows not working properly.
I had a customer who had a laptop with usb 3 ports and only 1 usb 2 port. The usb 2 port was dead and the bios or windows wouldnt even see it.
So test best thing to do is to test outside of windows to see if the usb is working. You can try booting up ubuntu off their live cd, you can also see if the bios sees the usb hooked up to it as well.
Is the keyboard and mouse usb? If so do they work when plugged into those ports?
Shane