Does iOS 4.2 change the voltage on the camera kit USB?
I could have sworn I've managed to use a USB keyboard with my iPad, and it shipped to me with 4.2.1 installed. Maybe my keyboard uses less voltage (it's one of those semi-novelty foldable ones).

Perhaps you could get around this limitation with a powered USB hub?

Update: I've recently heard rumour of someone working on a solution for this.