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What is the size of your SD card? I bought one of those 8gb ones for my reader. I was having similar issues and only way to get back the reader's home screen is to press the reset button at the back and then use the on/off slider to restart. This happened too many times and then on calling sony support, the rep told me that only 2gb is supported. I'm still using 8gb and it hangs now and then.
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