If the computer's screen is black and not gray on wake from sleep, this may be a separate issue for which you should contact Apple Technical Support or an Apple Authorized Service Provider.
Steps to isolate the cause of a USB-sleep issue:
1. Verify normal hardware function
To verify that your Macintosh hardware is working normally, disconnect all non-Apple devices, set the Extensions Manager to the Mac OS All extension set, restart the computer and then test sleep behavior. If the computer wakes and sleeps normally, proceed to the next step. If the computer does not sleep and wake properly, reset your PRAM and restart using the Mac OS Software Install or Restore CD that was included with your computer. For further information on resetting PRAM, see "Macintosh: How to Reset PRAM and NVRAM".
Starting up from a CD is achieved by holding down the "c" key during the startup process. A unique desktop pattern containing images of a CD-ROM disc verifies that you have successfully started up from CD. If the hardware functions normally when started up from the CD, this may indicate your system software has become unusable. At this point, consider a clean installation of the Mac OS software. See "Mac OS 8.5, Mac OS 9: Performing a Clean Installation" and 30691, "Mac OS: When and Why to Perform a Clean Installation" for information about clean installations and how to perform them.
If your Macintosh hardware continues to malfunction while started up from CD, you may contact Apple Technical Support or an Apple Authorized Service Provider.
2. Extensions troubleshooting
The first step is to eliminate third-party extension conflicts. For detailed information on using the Extensions Manager, refer to "Mac OS: Extensions Troubleshooting/Extensions Manager Features".
If you removed a folder named Multiprocessing from the Extensions folder, that may be the cause of the sleep issue. For more information, see "Mac OS: Do Not Remove Multiprocessing Folder".
With all added USB devices attached, restart your Macintosh using the Mac OS All extension set. Put the computer to sleep and wake it up a minimum of three times to verify correct operation. If the issue does not persist in this state, then a third-party extension conflict is the cause of the sleep issue. Once you isolate the faulty extension, you may seek an update of that software from the third-party vendor or seek an alternative solution, such as creating different extension sets. If the sleep issue persists when the computer has been started up with the Mac OS All extension set, then continue to the next step.
3. Eliminate conflict with Input Sprockets
Mac OS 9 contains an extension named "InputSprocket Extension." Some third-party USB devices may conflict with this extension. You may determine this by using the Extensions Manager, as in step 1 above. Duplicate the Mac OS All set, name the new set "test set" and disable the InputSprocket Extension. Restart the computer after connecting the third-party USB device that you are testing.
Versions of the Mac OS prior to Mac OS 9 may have a set of Input Sprocket extensions in place of the unified extension. Under the older system, some conflicts may be resolved by disabling individual device extensions. Any Input Sprocket extension may be identified by the unique yellow gear in its icon.
Input Sprockets provide support for USB game controllers. They should not be confused with SoundSprocket or DrawSprocket, which use the same yellow gear icon. If this extension is in conflict with your USB device and you do not use a game controller, disable this extension. Otherwise, create a new extension set within the Extensions Manager with Input Sprockets active.
4. Direct connection versus hub connection
There are two ways to connect a USB device to your USB-equipped Macintosh: directly to a port on your Macintosh computer, or to one of the ports on a USB hub. Apple USB keyboards contain a built-in USB hub, with one port on either side of the keyboard, most frequently used for connecting the Apple USB Mouse. A wide variety of third-party USB hubs are also available. If the issue still has not been isolated, try connecting the affected USB device directly to the logic board and alternatively to the keyboard. In some cases, the behavior may occur only with one of the two connections.
If this process has not isolated the USB-sleep issue in question, you may have a USB device that is not Macintosh compatible, or that requires updated drivers from the manufacturer. If you believe that the USB device in question is Macintosh compatible and has up-to-date software, you should verify that information with the manufacturer, then contact Apple Support.