Upgrading from Windows Home Premium to Windows Ultimate will enable XP Mode to be legally used. Having just successfully installed a driver and software for a device in XP Mode that was not supported on Windows 7 Professional 64-bit, I am reasonably sure that if you do upgrade, you will have a decent chance of a good result.
Another pathway is to buy a license for XP to run in Virtual PC. You can install and run Virtual PC on (nearly) any version of Windows. XP Mode itself is two separate things. First, it is a Virtual PC instance with XP installed and licensed for use. Second, it is a collection of integration tools that make the boundary between the virtual PC and the real PC a little less difficult to deal with.
It would appear to me that the ability to forward an unsupported USB device into the VM is a feature of Virtual PC itself, and so it should work without the full XP Mode integration.