Im not able copy the data to the pen drive nor I can format the pen drive

Download one of the following registry tweaks to enable or disable writing to USB drives.

Enable USB Write
http://www.howtogeek.com/wp-content/uploads/EnableUSBWrite.zip

Disable USB Write
http://www.howtogeek.com/wp-content/uploads/DisableUSBWrite.zip

Once you use the registry hack, you will have to reboot for the changes to take effect. One should also note that if you are using this trick, you should make sure that the users are not administrators on the computer, because they could easily change this setting back.

This works on Windows Vista as well.