It is probably not related to your problem but I have some devices, a scanner for example, that only work with a powered hub or directly connected to the motherboard ports.
I've used both the software that came on the little CD and the software downloaded from Franklin and both have worked. You do have to have a little icon in the notification area near the clock. It's been a few weeks since I lasted used it so I don't remember what it looks like. I also run batgraph on the reader and leave it turned on and plugged into the PC. That way it runs off USB power rather than battery power, although there is some question as to whether it really saves the batteries.
If you have third party fire wall software running, might it stop the Desktop Manager from finding the reader?
If you still have trouble with yours, let me know and I'll document a step by step as I reinstall and connect my EBM911. I don't use it anymore, I'm reading on the eBookwise 1150 these days.