Don't worry if it takes several minutes (with no progress bar), or if the program stops responding just wait until it's finished. Just plug your dead USB key into a Windows XP machine (real or virtual), run the app, click through all the recommended options, and let the software pulverize the drive's U3 enhancements into oblivion. Here's an excerpt with the essential details: All you need is a Windows machine (I found one which had Parallels Desktop installed and it worked fine) and the Drive Key Boot Utility from HP (45mb download, no registration required).
For all those having problems with the useless extra partition used in U3-enabled USB flash keys (the second 'CD' mounting full of Windows software), I've posted a detailed solution to the problem on my website.
