Let's say I buy a USB block erupter, can I use the same to mine Litecoins?
Does it require special software and setup to mine Litecoins?
No, you can't. USB block erupters are ASIC miners. They cannot have their algorithm modified in any way because the algorithm is designed into the silicon. They can only mine coins that use the same mining algorithm as Bitcoin (SHA256d) such as Namecoin and Devcoin.