starting with the USB service issue, I think that this could be due to a missing visual C++ runtimes package, although the error message isn’t exactly helpful. Please try downloading and installing the Microsoft Visual C++ 2012 Redistributable package (x86) and see if it helps. (The older USB service depends on the 2010 runtimes, which might explain why it works when the newer one doesn’t.)
For the firmware installation issue, please try the firmware upgrade tool in the Gaze SDK tools package on the REX setup page. Even if it doesn’t work right away, it might still get you a more informative error message.