After nearly two weeks of troubleshooting it has come down to this. My dealer got a hold of his own IR-Pro and borrowed a PS3. At the shop, everything worked perfect straight away. He brought those components to my house and swapped them for mine......but they didn't work!
My dealer noticed the USB adapter I had was showing a red light not green. So we tried plugging in the IR-Pro to various powered USB ports (the controller, a laptop, etc) but still nothing worked right.
He called and had a Belkin USB power adapter dropped off........plugged it in and everything worked perfect.
Bottom line is I was using a USB power adapter that was not up to snuff. After replacing it with a Belkin, everything works perfect......unbelievable.
Perhaps a note to Schmartz......they should state the voltage requirements of the IR-Pro, recommend a certain USB adapter............OR.......for the price of the IR-PRO, simply include a USB power adapter that is known to support the IR-Pro.