Helping people with computers... one answer at a time.
I'm afraid you probably answered your own question. Installing SP1 on top of SP2 should not work. To be honest, I'm surprised that installing SP1 on top of SP2 didn't give you some kind of error message.
But if it succeeded ... well, that's just not good.
First let's be clear. Service packs are cumulative. If you install SP2 you don't need to install SP1 ... everything in SP1 is already in SP2 (unless of course it was something that needed to be fixed by SP2).
And if you don't already have SP1, you don't need to install it before SP2 ... just install SP2.
As I said, installing SP1 on top of SP2, if it actually succeeds, can only cause problems, in my opinion. I'd certainly suspect it with the symptoms you're seeing on your USB drive.
If you're trying to revert from having installed SP2, you need to use uninstall, if you had SP2 create an uninstall directory when it was installed. If you didn't, you'll need to reinstall Windows XP to revert.
If you're just trying to fix a problem you believe has been caused by SP2, then I'd start by running the system file checker (See What is the System File Checker, and how do I run it?).
But I will warn you. If SP2 caused you problems, there are many possible reasons, most of which are in your control. Making sure you're spyware-free before you install it is perhaps the most important, so if you do start over, make sure your machine is as clean as possible and follow the instructions in my prior article Will SP2 Crash my machine?.
But you don't need to install SP1 if you're going to install SP2.