If I use your first code, I can define my event like this:

    // define USB class guid (from devguid.h)
    static readonly Guid GUID_DEVCLASS_USB = new Guid("{36fc9e60-c465-11cf-8056-444553540000}");

    static void watcher_EventArrived(object sender, EventArrivedEventArgs e)
    {
        ManagementBaseObject instance = (ManagementBaseObject )e.NewEvent["TargetInstance"];
        if (new Guid((string)instance["ClassGuid"]) == GUID_DEVCLASS_USB)
        {
            // we're only interested by USB devices, dump all props
            foreach (var property in instance.Properties)
            {
                Console.WriteLine(property.Name + " = " + property.Value);
            }
        }
    }

And this will dump something like this:

Availability =
Caption = USB Mass Storage Device
ClassGuid = {36fc9e60-c465-11cf-8056-444553540000}
CompatibleID = System.String[]
ConfigManagerErrorCode = 0
ConfigManagerUserConfig = False
CreationClassName = Win32_PnPEntity
Description = USB Mass Storage Device
DeviceID = USB\VID_18A5&PID_0243\07072BE66DD78609
ErrorCleared =
ErrorDescription =
HardwareID = System.String[]
InstallDate =
LastErrorCode =
Manufacturer = Compatible USB storage device
Name = USB Mass Storage Device
PNPDeviceID = USB\VID_18A5&PID_0243\07072BE66DD78609
PowerManagementCapabilities =
PowerManagementSupported =
Service = USBSTOR
Status = OK
StatusInfo =
SystemCreationClassName = Win32_ComputerSystem
SystemName = KILROY_WAS_HERE

This should contain everything you need, including the device ID that you can get with something like instance["DeviceID"].