In my quest to resolve the FsUsbService64 Service Initiali Failed errors, I found a newer version of KIES on this website.

http://dls.scione-music.de/KIES/

Downloaded and installed Kies_1.5.3.10104_66.exe 20-Nov-2010 16:14 136M

and voila, no more errors !! Problem Resolved !! Loads super fast as well.

However, I am not sure where this version come from as it is newer... than official Samsung version. If any one knows, please share.

If you have USB driver issues, click on KIES pull down menu at top left and click on Driver Recovery. It should resolve your USB Driver issues.