USB flash drives with Windows 2003 GPO

We have a set of policies in place that limit what our student users can do on a workstation (workstations are mostly XP, with a few w2k). Now that many students are using portable USB storage devices instead of floppy disks, we’re seeing errors when they try to eject the devices. What do I need to set in our GPO that will allow students to install these devices (if necessary) and to safely eject them without errors?