USB Drive Letter Manager (USBDLM) is a Windows service that gives control over Window's drive letter assignment for USB drives.

Running as service makes it independent of the logged on user's privileges, so there is no need to give the users the privilege to change drive letters.

It automatically solves conflicts between USB drives and network or subset drives of the currently logged on user.
Furthermore, you can define new default letters for USB drives and much more.

USB Drive Letter Manager (USBDLM) can:

check if the letter is used by a network share of the currently logged on user and assign the next letter that is available
reserve letters, so they are not used for local drives
assign a letter from a list of new default letters, also dependent on many different criteria as the active user, drive type, connection (USB, FireWire), USB port, volume label, size and others
assign letters for a specific USB drive by putting an INI file on the drive
remove the drive letters of card readers until you insert a card
show a balloon tip with the assigned drive letter(s)
define autorun events depending on many different criteria
many other things, see help file, available online as HTML version too