Primary requirements:
Good programming skills
Understanding how USB works
Either programming or buying a USB stack
understanding that there are hardly any Cortex-M3 devices with the amount of SRAM you want to use for images
Storing images in Flash is possible but then you also need to understand how to program flash on your device.
Based on your questions, there is lots for you to learn before you can attack such a task!
btw. a Cortex-M3 might really be the wrong device for this.
Check out some ARM9 such as SAM9260, LPC3143 and others. Much better suited.
Thank you for your valuable reply,
Yes, there are many things to learn for me. I know AVR very well but I am new to ARM.
LPC 3143 looks interesting sir.
I wanted to use LPC1759 because it has quadrature encoder interface. One more thing I am going to use micro SD card for image storage.Please give your guidance.
LPC1343 has USB HID implemented, I am newbie in that area but will do in the near future a project with this proc.
For 200kb data you need some sort of external memory.