Does it work OK under Windows? It might be something to do with Verbatim's V-Safe 100 security application?
Load Disk Utility and see if it shows up. You could try re-partitioning it with MBR and then formatting as FAT32, that's if you've no data on it you want to keep.
I've never had a problem with any flash drive on my Unibody running 10.5.6.
Are you sure your USB ports are functioning properly to begin with?
Still, when I unplug a USB drive (drag it to the recycle bin) and put it back in right after, it is not recognised. I have to restart the OS to have it recognised. Anyone with a suggestion as to how I make it automatic without having to restart the OS?