Can USB 1.1 devices be used with Windows Vista?

Yes. Most USB keyboards and mice are technically USB 1.1 devices, even if they are new. Keyboards and mice simply do not need the amount of bandwidth provided by USB 2.0.

So Windows Vista has to be capable of supporting USB 1.1 devices, or at least USB 1.1 speed (finding the drivers for the device is another story) in order to use USB keyboards and mice.