I am having v3 software problems and spent an hour plus on IM help with no resolution. After a clean clean install of software (deleting all folders) and re-authorizing my PC, and hard resetting my PRS700BC I still get the error.
My last test, after all the clean install, was to download one purchased content and try to sync. Crash. Very frustrating as now I have no content on the device and have to wait for the East Coast to wake up and call.
The Sony eBook software is such a nightmare. I thought v3 would be better, but so far it appears that only the Chrome has changed. Very unstable it appears.