I have not tested it but I do not see why it would not work.
You install a driver into the windows VM to connect to the USB over ethernet so changing the virtual hardware platform will not effect this.
I just wanted to post that this solution works perfectly. We went ahead and bought 2 of these devices for redundancy. Good fix, it's a shame this hasn't been implemented yet in some form by default.
Since a network USB hub is a virtual USB device it works for HA, vMotion etc. If a USB device were plugged directly into a host it couldn't be moved.
True but at least the application would be workable if pass through was an available option. As of the time I was writing this original post, pass through wasn't even working which seems to be a hole. Understandably USB isn't exactly the easiest technology to deal with, it clearly should have been included as promised at vSphere release. It was one of the primary reason why my company purchased the upgrade from 3.5 to 4.0. Upon upgrade, pass through was still NOT an option. This may have changed by now, but I already have a solution in place and it was a 3rd party implementation.
Keep in mind this is just my opinion. I am not flaming VMware by any means, I am just frustrated by the prioritization of something I thought was rather important.
The device is being used for an archaic hardware key for some legacy software that predates my tenure here. Unfortunately the company that originally developed the software isn't willing to make a change without us purchasing a new version or paying for some development work and to be honest their product really isn't good enough to merit spending the money (their idea of security is a USB key... that should show you the quality of software right there).