Hmmm. Before the eBook Library software recognizes a SD card, there has to be a folder named "Sony Reader" on the card. Maybe the same is true for the Reader?
The books don't have to be in the "Sony Reader" folder (if you transfer them to the card using the eBook Library software, it'll put them inside Sony Reader/books, if I remember correctly), but I think the folder may need to be there.
HTH
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