I recently got a Matias Tactile Pro 3 keyboard for my Dell XPS 435MT that is running Windows 7 Ultimate (x64) Service Pack 1 (build 7601). 

Board: Dell Inc. 0R849J A01 Bus Clock: 133 megahertz BIOS: Dell Inc. 1.1.3 09/24/2009

However, the PC would display the following Keyboard Failure error message at start up:

            Keyboard Failure
            Press F2 to Run SETUP
            Press F1 to load default values and continue

Below are additional details and the work-around: 

The MTP keyboard is plugged into a USB port on the back of my PC.  These USB ports work for other USB keyboards.

If another USB keyboard is plugged into an USB 4-port extender (also plugged into the back of the PC) then the MTP does not get the keyboard failure error at start up.

If another USB keyboard is not plugged into an USB 4-port extender then the MTP does get the keyboard failure error at start up.  Then I can plug the other keyboard into the USB extender and press F1 on this keyboard and the start up will go through.  And I can use the MTP.

I have discussed this issue with Matias' technical support and their detailed answer is below:

"I've seen this problem once before, about 3 years ago. A public library had bought several keyboards to use with their computers, and they all had the same problem you have. The cause ended up being that the BIOS on their computers was buggy.

All computers run software called BIOS at the beginning when they are starting up. The BIOS controls "Basic Input Output" functions, such as keyboards. However, in rare situations, the computers' BIOS is buggy, and doesn't handle certain kinds of high end keyboards properly. I think that's the situation you have. I predict that the other USB keyboard you plugged in did not have a USB hub or had a more basic USB hub, and was just a basic keyboard.

So, there are two ways of fixing this problem. Method #1 is to contact Dell and ask for any "patches" to update the BIOS to fix the bug. Method #2 is to do what you are doing, which is basically telling the computer "OK, I know you are confused by the fact this is a high-end keyboard, so let me just show you this basic keyboard to reassure you that there really is a keyboard attached, so that you'll let me actually use the keyboard I really want to use"."

I have also checked the Dell site for any BIOS update for my system and there isn't any.  I would really appreciate getting a BIOS update to fix this problem.  Thanks!