LCD usb controller design - is my pot suitable
PWM using an output from your MCU would be a much better way of controlling the brightness of the LEDs than using a pot connected directly to them. You could read the pot value with an ADC, and use that to control the PWM. You will need a suitable driver, of course, such as a MOSFET.

The AVR you are using isn't suitable for USB; you need one of the USB AVRs, such as the AT90USB162.

The AVR can run at any speed, but it needs a fast clock to handle USB comms. Use delays to slow things down for the LCD.