USB Joystick with Windows XP Mode

Sorry, I do not catch what you have done. In the Windows XP Mode window, the only USB peripherals I see with the USB Button are the printer and the camera. I never succeed to get the game controller, which is correctly installed under Windows 7.
 
Remember that XP mode is NOT built for gaming. Thus it may not be possible to enable the game peripherals. (Not sure, i haven't tried it yet)

I assume you're doing this to play an old title that doesn't work in Windows 7. What game is it, pray tell? Have you tried the Compatibility wizard yet?
 
Yes, it is for Combat Flight Simulator which I did not succeed to install under Windows 7 but can be under the Virtual PC XP Mode. It looks like working with keyboard, but there is no fun ...