You cannot use your USB keyboard during the boot process of any Linux distribution. Unlike Windows, Linux loads itself in many stages. First is the boot loader, then the filesystem-independant portion of the kernel, the file system itself and finaly the file system-dependant portion of the kernel.
Linux "knows" your hardware first when it loads at least the first portion of the kernel (there're the harddisks, the video and probably other hardware drivers&modules). If the kernel was compiled with module support for USB and not as built-in support, then by no chance you can use any USB device prior the last part of the kernel has load up.
The boot loader (regardles of LILO, GRUB, LOADLIN or any other one) also does not know anything about USB, so you can use only standard PS2 keyboards if you want to have keyboard working at boot time.
So, provide an USBtoPS2 adapter for your keyboard (I hope it is selfpowered, because if not, you can't use it even you provide that adapter) and then you can use your keyboard at the GRUB prompt.
Then for the problem you have with the boot loader. If GRUB drops in the command line, without showing any menu or boot interface, this means the second stage of the boot loader (the portion that locates the kernel to load) was not found and GRUB gives you chance do do the boot manually.
If you manage to get your keyboard working, do the following at the boot promp of GRUB:
GRUB> find /boot/menu.lst
This should tell you on which partition GRUB can find its configuration file. Let suppose it returns no error, but says this:
Then just write these commands to boot Linux
GRUB> root (h1,2)
GRUB> kernel (h1,2)/vmlinuz
Post here if you get into Linux, if not, post here any errors you get when you try to do the commands listed above.