Error: Windows encountered a problem installing the driver software for your device. Windows Vista

I encountered this error trying to install flash drives in Windows. When you insert the drive, Windows Searches for drivers, and comes back with the error message:

Windows could not find driver software for your device

Windows was unable to install your %Device%

This problem has been around for a while, and is generally caused by a missing or corrupt Infcache.1

There is a hotfix to address this, you can find the links at the bottom of this KB article. The hotfix is also included in Windows Vista SP1, so installing SP1 should fix the problem as well.