USB2.0 with XP is completely possible. On my old system, the front ports had to be USB 2.0 ports, it wasn't a software upgrade, it was actually hardware that needed to be sent to me from the case maker.
My external USB 2.0 devices worked just fine at USB2.0 rates. You'd need to check if the ports are 1.1 or 2.0. If 2.0 then it's a software issue