I had a similar adapter (with the wires) and I'm using XP (Native, not in a VM).
When I first connected it, it didn't work.
But one of the things I did was leave the USB device connected, but disconnected just the power (RED wire on mine) to the GOTEK, so it power cycled the device while it was connected to the PC.
Then it worked for me...
I've never had any problems with the XP machine seeing the USB device. It was just the flasher tool seeing the GOTEK.
Also, I'm sure you are doing this already, but make sure you go into Device Manager to see what COMM port your USB device is getting and set the flasher tool to that one.
In my case, it was COMM 6.
(Also, if you have a multimeter, probably worth checking the voltage on those 2 lines (Red/black on mine) to make sure you've got 5V)