I have found the solution! I used the help function from my libraries e-books section and I got a response from OMC. I just tried it and it works!
Here is my question and the response:
Prior to the iOS5 upgrade, I was able to download WMA files to my PC and then transfer them to my Apple device using the transfer wizard in OMC. OMC indicated that they are aware of the problem and plan to fix it with a newer version, but it has been three months and the problem has not been corrected. Do you know if they are even still planning a fix? thanks
We're sorry to hear that you are having trouble transferring OverDrive Media to your iPod. Please follow the steps below to transfer OverDrive titles to your iPod using the 'transfer' wizard in OverDrive Media Console.
1. Verify OverDrive Media Console v220.127.116.11 (or newer) is installed.
2. Verify iTunes v10.1 (or newer) is installed.
3. Check to see the Apple device is formatted for use with Microsoft Windows.
4. Enable the iTunes setting 'Manually manage music…'. To enable this setting please do the following:
* Connect the device to your computer.
* If it does not launch automatically, open iTunes
* In iTunes, locate the device in the left vertical navigation panel (under heading 'DEVICES'), and click the device. The 'Summary' screen is displayed.
* Place a checkmark next to option 'Manually manage music…'.
* Click the 'Apply' button. The iTunes 'Summary' screen refreshes, and your changes are saved.
* If desired, close iTunes.
5. Connect your portable player to your computer.
6. In OverDrive Media Console, highlight a title and click the 'Transfer' button. The Transfer Wizard is displayed.
7. Verify that the correct title is displayed on the first screen of the Transfer Wizard and click 'Next'.
8. In the 'Confirm' dialog box, select the Part(s) you want to transfer by checking the box(es) next to the Part name(s). Also, be sure to select your iPod's name from the 'Player' drop down menu.
9. Click 'Next' to begin transferring the file(s) to your device. When the transfer is complete, the Transfer Wizard displays a 'Success' message.
10. Click 'Finish' to exit the Transfer Wizard.
Once you have transferred a WMA audiobook to your device, a playlist will be created for the audiobook. Please note that WMA audiobooks will not be listed in 'Audiobooks' on your iOS device. You may need to take the following steps to move parts of the audiobook to your playlist:
1. Connect the device to your computer and run the iTunes application.
2. Under the 'Devices' sections, click the arrow to left of your device to expand the contents view. The list expands to display the 'Music' and 'Books' categories on your device.
3. Click on the 'Books' category under your device.
4. Drag the parts over to the playlist created for the audiobook, which is also located under your device name in iTunes.
5. Verify that the parts are in the correct order.