Here's a thought. Maybe you could partition your laptop's hard drive and install Win 98 in the other partition? I know one of the updates to Win 98 (SP-2?) had support for USB so the damn dongle may work. There are USB to Serial converter cables. Belkin makes for around $30. I need to use it as my laptop doesn't have a serial port or parallel either.
If it (i.e. Digitizer 2000) runs on Windows 2000, I don't see why it wouldn't work on XP. Maybe you could try it. If it doesn't, and the upgrade to Digitizer 10000 is out of the question, then partitioning may be a cheaper alternative and running some software like System Commander to switch operating systems.
Just a thought...
B~