No-one suggested the scanner was not plugged in.
It is not unknown for windows to lose contact with the device, despite it being plugged in, connected and switched on.
Had this happened, then the device would not show in 'My Computer'
You say yours is there, so that is not a problem.
We have different drivers for our scanners. When I right click my scanner entry in My Computer and choose 'properties', I get a dialogue with a diagnostics button on it. Do you have that too?
Things that could cause you problems are:
Incomplete scanner driver installation
USB port/driver problems/conflicts (are you using USB or parallell for connecting?)
The current drivers for your scanner are
Epson Twain v5.7f. Are you using these drivers?
After installing XP home, did you update it to service pack 2? (or is it already slipstreamed onto your install disc?)
v11.1 has been around for quite some time now, the first alpha's appearing around September '05
from your post above, you indicate that you were experiencing these problems with v10 also, so, when you say "it used to work" we're not talking about something that used to work last week, and now doesn't, we're talking much more long-term than that. Did I understand this correctly?
Did you check the FAQ's on the epson website?
You don't say if you tried or not since reinstalling windows; try opening MS Paint, click file, then get from scanner or camera. does that work?