I've found that it is sufficient to simply add your user to the VirtualBox group to gain access to USB devices. I'm not sure what the security implications of this are but to do this:

 nano /etc/group

And find the line that contains

 vboxusers:x:###:

Then add your user name after the colon

 vboxusers:x:###:username

Save & restart and USB devices should now be accessible.

In order to enable USB devices in VirtualBox under Debian Etch first determin the group number of the VirtualBox group (vboxusers). This can be done at the terminal by typing:

cat /etc/group | grep vboxusers

The output should look like this:

vboxusers:x:####:systemuser

Where #### is the group number.

With the group number in hand simply edit the /etc/init.d/mountkernfs.sh:

nano /etc/init.d/mountkernfs.sh

The above terminal command should be done as root or using the gui (Gnome):

gksu gedit /etc/init.d/mountkernfs.sh

Then change the line that reads:

domount usbfs usbdevfs /proc/bus/usb usbfs -onodev,noexec,nosuid

to:

domount usbfs usbdevfs /proc/bus/usb usbfs -onodev,noexec,nosuid,devgid=####,devmode=0664

where #### is the vboxusers group number.

Reboot and usb access will be enabled in VirtualBox.

~~DISCUSSION~~