OK, so it sounds to me like your Story is working OK, and so are the cables. The problem seems to be at your regular PC.
You said it comes up with a drive letter E, but when you try to put something on the Story it asks you to insert a disk? Perhaps it's doing what WinXP sometimes does, which is to assign a drive letter to a new device that's already in use.
Do you already have an E: drive (a CD or DVD drive, most likely) before you plug the Story in?
If you do, we've got to make Windows give the Story a drive letter that isn't already assigned to something else.
So:
1) boot up your Story, plug it in, connect it via USB,
2) Go to "My Computer on your desktop, right-click it, and choose the option "Manage"
3) In the dialogue that comes up, Click on "Disk Management" (you'll find it under "Storage"
4) In a few seconds, a list will come up on the right-hand side of the dialogue listing all the hardware devices on your system that have been assigned drive letters
5) The Story should be listed there, presumably with an E: drive letter assigned to it. Is there another device with the same drive letter?
6) Right-click on the Story, and choose "Change Drive Letter and Paths..."
7) In the dialogue that comes up, click on Change, and then in the drop-down box that comes up change the drive letter to the Story down the list to the next drive letter that isn't in use.
8) OK your way out of the dialogues.
Now, how are we doing?
(Oh, one last thing: when you disconnect the Story, are you in the habit of "stopping" the USB connection first? You really should. You double-click on the USB icon in the System Tray down in the bottom-right of your screen - the one that looks like a USB stick with a green arrow above it - then in the "Safely Remove Hardware" window click on the entry representing your Story and click "Stop". It'll then tell you it's safe to remove the device.)
Let us know how you do, yeah?
