Does anyone have any experience with USB as device on Overo ?

I am using an Overo Air & Summit board. omap3-console-images (kernel changed to run in USB device only mode).
The board loads and successfully starts file_storage gadget.

But when I connect the board to any host, it is recognized as full speed and there is an almost endless loop of port resets.
Windows always fails with a "device error" but linux sometimes (after few minutes) of resets, is able to speak with the device.

Are there any known issues with the USB port in device mode ? Any special settings that need be set ?