Hi Spiller,
thats right - you can not charge over the usb and use the reader at the same time.
sometimes (thats what i read here) if you are using the sony usb cable that came with the reader, you can not charge it if the e-library soft from sony is not on that computer.
the best is, if you buy a usb-charger cable for the psp, that has two "heads" - one mini usb and one plug for the charging hole in the reader.
i just bought a cheap third company charger for the reader on ebay. was only 11 bucks shipped to nyc.
good luck with your reader
harry
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