I just had the same problem -- trying to use an external USB 2.0 hard disk (a generic shiny aluminium enclosure) with its own external power source, on a 17" MBP running Leopard (10.5.1). I've used this drive before on PCs with both Windows and Linux, and never had a problem.
I tried connecting directly with all ports, and connecting via a powered USB 2.0 hub, through all ports -- Time Machine was unable to complete a backup because of the "found a transaction past the completion deadline" issue.
I finally (out of desperation) tried the connection through a USB 1.1 hub, unpowered, and it worked fine though was obviously unusably slow.
So just for completeness, I tried using the same powered USB 2.0 hub, but without the external power pack -- just bus power from the MBP.
I'm still seeing the occasional transaction past the completion deadline complaint in Console, but the backups are chugging along pretty well, up to 20GB out of 46GB so far where previously it maxed out at 300MB.
This is obviously not an ideal solution, but it's working well enough for me at present. It seems then that if you're having external USB HDD issues with a MBP, you should:
- try direct connections through all ports
- try connecting via powered USB 2.0 hub through all ports
- try connecting via an unpowered USB 2.0 hub through all ports
- finally, as an act of desperation (say you need to recover critical data and time isn't such an issue), try using a powered USB 1.1 hub and then an unpowered USB 1.1 hub through all ports.
Hope this helps someone, and I hope Apple fixes their buggy USB EHCI code soon.