I think your problem may be that you can't have BOTH the Kobo desktop app AND the Borders desktop app syncing with the one Kobo.
I originally started using the Borders App (because like you I bought my Kobo from Borders in Australia) but then when I discovered that the books were cheaper at Kobobooks.com I changed over to the Kobo Desktop App. But then the books that I had loaded via the Borders App didn't work.
So then I ditched both of them and now I use ADE or Calibre to load all my books regardless of their source.