Are you plugging the floppy directly into one of the USB ports on the back of the computer, or are you plugging it into an(unpowered) hub such as the one on the keyboard? Usually the message you're seeing is related to drawing too much power off one USB port. Plugging directly into the computer will generally remedy it.
When I need a floppy drive with my B&W, I use an Imation USB LS120 drive. This will function as a normal floppy drive, but also has the ability to read and write LS120 "Superdisks"(a competitor to Zip disks back in the day). Imation actually made them in a blue and white pinstripe color scheme that matched the original iMac and B&W G3, and there were a LOT sold back in the day to go along with these machines. These also have their own wall wart power supply so there should be no power issues.
OS 8.6 and 9.2 have no issues with mass storage devices, and I've also had zero issues getting either OS to recognize USB floppy drives(you may need to download a driver from Apple's website to get 8.6 for USB thumb drives).
If you badly need a floppy drive, it might be worth your effort to look for a beige G3. These have built-in floppy drives, although they don't work under OS X. The beige G3 are old world ROM Macs and have all the classic Mac connectivity goodies including ADB, SCSI(internal and external), and serial ports. You can easily install a USB and/or Firewire card in one if you need either of these.