I am sorry if this is a bit of a novice question but I am new to electronics and have come to a problem that I can't quite see an obvious answer for.
A while ago I had a bit of a scary encounter when connecting an Arduino powered machine to my pc. The device worked fine with a PC power supply but once I swopped it for an open frame type one I noticed some serious arcing when I brought the USB cable near my pc's port. After some research I determined that this was caused by the fact that the new power supply was not connected to earth internally and once I made the necessary modifications my problem was fixed.
What I am really stumped about is how consumer electronics product manage this floating voltage problem when interfacing with attached devices. What I am wondering is how for example a laptop running from its battery without any possible earth reference can connect to a USB printer without any problems. Is it that the internal regulator in the laptop immediately assumes the USB ground as its ground reference and if so, how would that prevent an initial arc?