I ordered a longer usb cable which arrived today from ebay, which is about 1m long.
This is a picture of the exact cable:
When using it with the Raspberry PI, the screen kept cutting off, and the PI would restart repetitively.
I also noticed some SD card reading errors.
When the PI didn't restart, and asked for a login, there was no response from a USB keyboard, which indicated it was not receiving enough power.
The power source is a 2A usb plug which works fine.
I swapped it for a friends Micro usb cable, which is only slightly shorter.
And instantly the problem went away, the Pi booted into debian perfectly.
I even tried his cable with an on board usb port, and despite the 500ma limit, it booted perfectly also.
I'd imagine this cheaper cable has thinner wires inside which are not quite capable of delivering 700ma of current, or may have a slightly more resistive conductor.
The cheaper cable worked fine on my friends phone for charging, and transferring data.
So if anyone out there has a PI that's restarting
or not accepting an input from a usb keyboard,
then it's most likely the power supply or the micro USB capable is not sufficient enough.