This has to be the most common problem that I deal with and luckily there is an easy fix.

I regularly have users coming to me who connect their device to Windows XP. Their devices are charging and the USB ports all look okay, but ActiveSync fails to initiate and cannot be made to connect. I have found this to be a cross device issue and can crop up even after a person has made a successful connection.

1) From the Start Menu, go to Settings and select the Connections page and choose USB to PC

2) Now untick Enable Advanced Network Functionality

Once you press OK, ActiveSync will automatically connect

Thanks Biomehanika.

Chris Herrera explains this  -

With the release of Windows Mobile 5.0, Microsoft changed the protocol used to sync via USB from PPP to RNDIS. This has caused some problems with VPNs and other networking software installed on the PC you sync with. So with AKU 2.3, Microsoft added back the ability to revert back to PPP. You can use this option to change the USB functionality for ActiveSync 4.x as well as Windows Mobile Device Center (WMDC) to improve network compatibility.

This has answered the question that I never got around to asking:

What exactly is does Enable Advances Network Functionality allow?

Thanks Laura

This is the Microsoft article explaining this:

http://support.microsoft.com/kb/938323

You're a genius! Been hunting everywhere to solve this problem.

 And you fixed it!

Welcome to The Connection, keefyp - glad you found your solution here.

Oh man.. this is awesome.. a simple uncheck really tickled the problemmm...

hats off to you....

--KarthikShanth.

Welcome to The Connection, karthikshanth - I'm so glad that this worked for you.

 This is generally the fix, but on some devices this will not resolve the issue either, the samsung omnia, palm pro and touch pro all still had problems connecting.  To fix it with these devices I did a re-install of activesync on XP, seems to resolve it too.  -This may just be my own PC though, stranger things have happened. 

mm... usefull info...