I found this solution online if USB device doesn't appear to the guest OS and is unavailable inside the guest OS or USB devices appear but are grayed out.
1. In the host (Lucid 10.04 for example), System - Administration - Users and Groups
2. Click on the unlock or key icon and give your password.
4. Click Manage Groups.
5. In the Groups settings List Box, navigate down to vboxusers
6. With vboxusers highlighted, click properties
7. Click the check box next to your normal user to indicate you want the normal user to be a member of the vboxusers group.
8. Navigate next to lp (printer manager account) in Groups settings List Box.
9. With lp highlighted, click properties
10. Click the check box next to your normal user to indicate you want the normal user to be a member of the lp group.
11. reboot the host.
