I can't find it in my notes, but I am pretty sure the directory was added by firmware after 2.1.5.
The Touch can be fussy about SD cards. I have three. Two work fine but the third is completely ignored. This has changed with the firmware as I have seen reports that a card that didn't work with an older firmware does work now.
If the card is working, it will be listed on the "Device information" page of the settings. Plus, if you put a book on the card it will be added to the library.