well, I know for sure it works on the core, I have installed using those steps. The PnP may not be working (haven't actually tested that), but here's a couple hints for ya.
1. I see you have Insteon PLM Device 68 above. All looks good from that screen. Check to see if you have a log file created..
the log will be:
and it will be on the CORE (as per your above setup.)
If that log file exists, do this:
tail -f /var/log/pluto/68_Generic_Serial_Device.log
and reload router (in another window) and watch the log progress..
You should see some OUT: lines in green, and some IN: lines in red..
those signify the actual bytes being sent/received through the serial port (or usb dongle in your case)
If you see green and red lines (in and out) and still can't get it to work, post a section of your log, and I'll look at it.
I have been doing work on the PnP Lighting wizard, and I KNOW that doesn't work currently. (I think I've found the problem)
I'll be updating the wiki within the next few days.