thanks for the hint, but it does NOT work. All USB peripherals are listed properly BUT the smart card reader(s) - there is no change before and after performing the procedure suggested.

I tend to remember reading in Workstation 6.5 beta release notes that they plan to support smart card sharing among the host and guests, perhaps some part of that made it to Fusion, but I want to fully dedicate the smart card reader to my guest machine, not to share it with the host. I will try to look up the Workstation 6.5 notes if there was a way to turn that off - perhaps it would make the readers to re-appear. Or I will have to roll back to the released version, as I cannot do any work without the readers.

Yes, that has solved the issue. I have already given up and rolled back to Fusion 1.x but I have upgraded again to 2.0 beta 1 and it is working OK with the suggested line in the .vmx file. Thanks a lot.