Recently, I was alerted to a customer having issues getting the USB OTG port functioning as a host on the iMX25 PDK with the 09_12 Linux drop. So, I decided to try it.
It turns out that the loading of the modules have to be done in a particular order, or it will not work.
To get mass storage working to detect a USB Thumb Drive: (Again, you MUST follow this order)
1) modprobe fsl_otg_arc
2) modprobe ehci-hcd
Of course, these modules must be selected in the USB features.
Hope this helps.