Thanks guys for the replies.
gr00vy0ne, its performance is the same since I have tried it on another system as well. I have also tried another unit (cruzer mini 256 mb usb 2.0) which belonged to my friend and it gave me the same slow data transfer rates. so, it couldnt be my unit which is problematic.
If 8 MB/sec is the max rates that one can get then doesnt it suck that these people advertise 480 Mbps (60 MBps) speeds?
Also, after this experience, I was wondering if the IEEE interface would be better than USB 2.0. Since, I want to buy the Sony 80 gb gigavault drive which is available with the USB 2.0 interface and the IEEE interface. Could you’ll suggest if I should go in for the IEEE interface one or stick with USB 2.0?