So, we tried a 4gb MicroSD HC which worked instantly. The Reader identified the card and in the settings it added 4 gigs of memory under "Micro SD" below "Onboard Storage".
I'm not sure what the problem was with the 2GB Micro SD card, except that it was not an HC card. It's also odd that the reader had no problem with the 4GBs, despite what I've heard about KoBo touch having trouble with cards larger than 2GBs.
Anyway, thanks again for the help, everyone!
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