FAT32 no longer readable on Windows 7

I have a strange problem on my Dell 8100 that has developed in the last few months.  Basically any USB storage device that is FAT32 will not read on the machine.  I know it was working in April as I downloaded a load of photos from SD cards.  My USB memory sticks have the same problem and I use them to move files between my office and home machines, they all read on the office machine which is an almost identical 8100 (but running Windows 2008) and if I format them NTFS then they are fine.

Same with a Samsung 160GB usb drive.

Trouble is I can't just change to NTFS for everything as cameras won't like NTFS SD cards and my IPod also needs to be FAT32.

Basically when you plug them in Windows 7 says I need to format the device, if I don't they show up as Raw and unusable.  Even stranger if I do format them FAT32 it says it's failed but if I take them to another machine they are formatted correctly.  It seems to be a read only FAT32 issue!

The USB ports work fine for printers and with NTFS so I'd assume it's not hardware.

Behaves the same in Safe mode, so probably not something I have installed.

My restore points don't go back far enough to try that, so I can't prove it isn't a Windows update.

I can find similar problems on Windows 7 forums, but none resolved.

Any ideas?