There's a new version of the Sony Reader library (v3.1.01.01250) available at esupport.sony.com. Here's the relevent blurb:
Reader Library version 3.1.01 is a minor update from version 3.1 to resolve an issue where the Reader Library software may not start. If you are using Reader Library version 3.1 and are not experiencing this issue, you do not need to install version 3.1.01.
And here's some suggestions from Nathaniel @ support:
Before installing the updated reader library please uninstall the previous version of the Reader Library. After uninstalling it is recommended to run MSCONFIG command prompt and disable all startup and services other than the Microsoft services. If necessary please uninstall the current anti virus software, but only if it is necessary.