I found for Windows thumb drive it needs to be booted from the internal USB. For Linux based OS (that includes VMWare) both the internal and external ports work.Thanks to everyone who replied about my Wiwynn Win 7 issue earlier--finally got windows 7 installed. Not even sure why I was having issues but loading from an official 5 year old windows 7 cd using an "amazon basics" usb cd drive plugged into the inside usb port did the trick.
One more question: has anyone figured out how to disable the staggered boot delay feature on the Wiwynn? With just a few of these, that feature is not really needed. I see some jumpers around the fans on the front of the power interconnect boards. Wonder if those control that?
I think the internal port is designed to be the "booting" port, while the external port maybe for keyboard/mouse combo. NorCalm confirmed the same thing IIRC.