Sorry, but this is wrong! I have the same problem with an USB extension cable. When you insert the extension cable, a new entry appears in the device manager labeled "USB 2.0 Hub". Unfortunately, Windows 7 is unable to find a suitable driver for it. The same cable works with XP, which is able to find the right driver...
If this can help!
Also, I would be interested if someone has found the right driver for Seven!
Look in Device Manager and go through the Properties of each USB hub to see if the cable you plugged in shares with another device which is already using all or most of the 500mA allowance. As has been said, the longer the cable the worse it gets - that power is stretched to the limit before it even sees the device at the other end. The build-in drivers for the hubs are the right ones and the same driver that runs the device without an extension cable will be the right one with that cable.