Okay, so I solved my own problem 12 hours after I realised this was a problem. *GASP* *SIGH*. This is what I get for being obsessive. I was unwilling to let go of the problem (thus sacrificing time I had allotted to grade student papers etc.).
I. The Issue
I had created PDF bookmarks to serve as Table of Contents. These bookmarks were not showing up on the Sony as the Table of Contents. In fact, they were nowhere to be found. Usually, if there is a Table of Contents, I can press the "Option" key and a "Table of Contents" link will come up in the subsequent box.
II. The Problem & Solution
Sony PRS-700 only read PDF bookmarks of a certain kind. Under Acrobat Professional 9 (and previous versions) you can create at least two type of bookmarks.
a. First type bookmark (Type A) whose action is "Go to a page in this document" and then you type in the page number you want the link to go to. Sony does not recognise this type of bookmark.
b. Second type of bookmark (Type B) whose action is "Go to a page number in this document" and then you indicate it by linking it to a pre-existing "Named Destination".
This means that prior to creating the bookmarks, you need to mark the destinations and name them. These will appear as "Destinations" under the Navigation Panel in the View menu. Sony does recognise this type of bookmark as "Table of Contents". If you want to know how to create these "Destinations" refer to the help system that is part of Acrobat Professional. It's too long for me to explain although it's not complicated at all.
In terms of what the end-user sees, bookmark "Type A" and bookmark "Type B" produce exactly the same results. But, again, Sony PRS-700 only recognise "Type B" as "Table of Contents".
"Type A" bookmark is simpler and faster to create. The PRS-700 is a bit inane in this regards but at least now I can continue editing my PDF books and have the Table of Contents show up.
But first...to grade student papers and do some paper book reading.