The problem you are describing should not be dependant on older firmware in either the drive or the Prolific chip. Even with both you should still get a burn started. I would look to the media or a possibility of a problem with the USB connection or the external case. Possibly the burning app. Try burning a CD and see what happens.
BTW, I tried the 1621 firmware and the burn quality was worse than anything I have seen since the old days, almost unreadable. You should be able to get 12X with no problem with B7V9 and the Prolific 3507.
I haven't tested the USB, only the firewire but others here have had luck with the USB.