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I was thinking more about your problem with USB mode. In my Sony Reader Library preferences, I have it turned off so that it doesn't launch the Sony software automatically when I plug in my ereader. Your Windows 7 computer doesn't have the software installed. I wonder if your Windows XP computer was trying to launch the Reader Library to recognize your device and that's why it wouldn't go into USB mode? Just a thought in case you encounter this problem again.
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