USB thumb drive (disk on key) doesn't work in windows 7

I had many times that windows 7 would not react when I inserted my disk on key - nothing happened.

This can be solved many times by disabling the power management on the USB slots:
Start->"power options" (enter in search box and select it when it comes up)->"change plan setting"->"change advanced power settings"
open "USB settings", open "USB selective suspend setting" -> change it to "Disabled" click OK and boot the machine.

If it still doesn't work, it maybe because of daemon tools, try opening daemon tools and removing the virtual devices and then closing daemon tools and re-inserting the disk on key.