Internal keyboard and trackpad stop working after plugging in USB device

Yes, the culprit is the Android File Transfer application. And following the steps outlined here (disabling the annoying Android File Transfer Agent) seems to solve this. (No need to completely remove it, as it may be useful)

The underlying issue is logged with the developers as 58416: Android File Transfer - Mac 10.8.4 AppleUSBMultitouchDriver Keyboard Input Delays.

I had the same intermittent problem when connecting my Nexus 4. I did some research and narrowed down my logs to the following:

Jun 10 01:22:30 Steves-MacBook-Pro kernel[0]: CODE SIGNING: cs_invalid_page(0x1000): p=971[ksadmin] final status 0x0, allowing (remove VALID) page
Jun 10 01:22:30 Steves-MacBook-Pro kernel[0]: CODE SIGNING: cs_invalid_page(0x1000): p=976[ksadmin] final status 0x0, allowing (remove VALID) page
Jun 10 01:22:31 Steves-MacBook-Pro kernel[0]: CODE SIGNING: cs_invalid_page(0x1000): p=977[ksadmin] final status 0x0, allowing (remove VALID) page
Jun 10 01:22:31 Steves-MacBook-Pro kernel[0]: AppleUSBMultitouchDriver::message - kIOUSBMessagePortHasBeenReset.
Jun 10 01:22:37 Steves-MacBook-Pro kernel[0]: USBF:    19914. 97    AppleUSBEHCI::Found a transaction which hasn't moved in 5000 milliseconds on bus 0x1d, timing out! (Addr: 4, EP: 0)
Jun 10 01:22:37 Steves-MacBook-Pro kernel[0]: AppleUSBMultitouchDriver::_deviceSetReport - DeviceRequest for reportID 0xac returned with result 0xe0004051 - retrying
Jun 10 01:22:37 Steves-MacBook-Pro kernel[0]: AppleUSBMultitouchDriver::_deviceSetReport - DeviceRequest for reportID 0xac returned with result 0xe000404f - retrying
Jun 10 01:22:37 Steves-MacBook-Pro kernel[0]: AppleUSBMultitouchDriver::_deviceSetReport - DeviceRequest returned error 0xe000404f (interface 1, reportID 0xac, payload 2
Jun 10 01:22:37 Steves-MacBook-Pro kernel[0]: AppleUSBMultitouchDebug: _deviceSetReport returned an error in configureDataMode
Jun 10 01:23:25 Steves-MacBook-Pro.local loginwindow[60]: magsafeStateChanged state changed old 1 new 2
Jun 10 01:24:26 localhost bootlog[0]: BOOT_TIME 1402356266 0

From what I can tell this is essentially that the AppleUSBMultitouchDriver is crashing. Then it tries to restart the daemon in charge and finally bails out with an error. After that the keyboard and touchpad are non responsive.

I have tried to close the macbook (putting it into sleep mode), then waking it up. This does not fix the problem. However, I found this thread discussing conflicting with the Android File Transfer app:

https://code.google.com/p/android/issues/detail?id=58416

Do you have an Android device?

Older issues occur from a hardware issue (circa 2009). In my case I have a faulty cable which causes the connection to drop/reconnect every now and then. This causes an increase in the chances of the software malfunction occurring.

I have the same problem when I plug in my Nexus 5. The only solution that I have found other than restarting my computer is to unplug and then plug back in my phone until the trackpad and keyboard start responding. This can take a few tries but it is faster then restarting your computer.

I have also had this problem and removing Android File Transfer from OS X seems to resolve the problem for me.

I have the same issue. For those reporting rebooting as a fix, just want to suggest something that I found out. After several frustrating reboots, I realized if I just plugged/unplugged the USB cable in question several times I eventually get control of mouse/keyboard back.

Still super annoying, especially if I don't realize it's in this state and walk away from my desk (where the USB cable is).