Going from version 3 to 4 is quite a change and there's a lot of
difference so your VM's may not port over. I started afresh with
version 4 when installing 12.04 this time. If you find they don't then
you can go back to version 3 if you've still got the installer files
of course ( I have 64bit installers 3.2 and both 32bit and 64bit for
version 3.1 if you get stuck ).

I would just re-install the VB client OSes and use the old vdi files.
They have changed the way it works but the image files will be intact. You
may have to search for them with a file manager because they changed
locations. They used to be in a hidden folder but are now in VirtualBox
VMs. Remember to show your hidden folders first (Ctrl+H for Nautilus and
Alt+. for Dolphin). It has been so long since I used version 3.x that I
can't remember the previous location -- or it could be old age.

Im trying to follow these instructions to get the latest updates on VB
but Im just getting error after error.

When I add the line

deb http://download.virtualbox.org/virtualbox/debian lucid contrib non-free

to the list and then add the key, it says
W: GPG error: http://download.virtualbox.org lucid Release: The following
signatures were invalid: BADSIG 54422A4B98AB5139 Oracle Corporation

Ive managed to get virtual box updated and its working fine. Love the mouse
being able to move from windows to ubuntu and back without the key press but, I
still dont have access to the USB. It sees my cdrom and network card but not the
USB..

Ive gone back through and made sure the extension pack is installed, added
guest devices through the device menu and made sure there is a vboxusers
group and my name is added. In the settings menu it says USB 2.0 checked
but when you start XP, no usb devices are found.

You have to unmount the drive from your host OS first, then it should work
as advertised...

When you add an outside source then you need to add their key. This is for
Synaptic. https://help.ubuntu.com/community/Repositories/Ubuntu Look at the
section Authentication Tab. You can also download and add it from the
commandline. See: https://www.virtualbox.org/wiki/Linux_Downloads Look for
the Public Key section.See the line that begins with wget. Copy and paste
the line into a terminal.

This will fix your error, but not necessarily your problem.

I can see the thumbdrive is available.
I clicked on it ... and as far as I can tell, it just put a check next to
it.
Still cant access it.

I went to Device Manager and reinstalled the driver.
It worked!

Is the USB icon on the bottom right of the VM window greyed out or
just not present ? Presumably you have USB devices plugged in for it
to use

May be the change in version of VBox, and to verify this you could try
setting up a new WinXP VM temporarily to see if USB worked in that. If
so then it's the upgrade that's not ported the VM fully and you'd need
to start all over again