First: I'm not sure if I can help with your problem. But maybe this might. At the following site:
http://www.sony.de/support/de/conten...130-win/PRS-T1
you can still get a previous version of the PRS T1 firmware.
You need to check the box "I habe die Nutz..."(I've read the terms) then hit "Herunterladen"(download).
Now try to do a factory-reset on your T1:
http://www.google.de/url?sa=t&rct=j&...,d.bGE&cad=rja
Third: un-install any and all versions of Sony's Reader Sofware from your PC.
I know Sony says that this is the right software for your T1, but it really just makes any problems you have worse!
Fourth: cross your fingers and try to hook it up via USB. Wait a while, an efed up T1 can be fickle. Last chance: try to connect it to a friends pc.
If you get it connected run the firmware installer of the older version(PRS-T1_Updater_1.0.05.11130.exe).
GOOD LUCK!
I pre-ordered the PRS T1 at the very start and did all the updates(there were few) and i gotta say I'm really happy with it, even if there were problems at the start. But I never rooted(don't mess with something that works).
The previous post makes me very sceptical about the latest frimware update.
So, unless you really need GoogleBooks on your T1
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I don't recommend using the latest update(1.0.06.03210)
ps: Google doesn't have the best book store on the internet, but it is one of the better helpers to find resources in the best (meta)"book store" that is the internet.