I had this problem too. When i went to the Device Manager, it showed unknown device when i plugged my phone in using the USB cable.
Here is what I did (Windows 7). If you see an unknown device, right click it and select Update Driver Software. Click Browse my computer for driver software, then click Let me pick from a list of device drivers on my computer. Then click on the Have Disk button, then browse to C:\Program Files\Zune\Drivers\Zune and select WMZuneSerUSB.inf. Then select Windows Phone 7. Hit Next and you should now see your Unknown Device show up as either Windows Phone or the name of your phone under Portable Devices in the Device Manager.
Actually, I forget if it is WMZuneSerUSB.inf or Zune.inf, so you'll need to try both.
Hope this helps.