Because my computer loves to mess with me, I can't hook my mother's 505 to the computer. So we use SD cards. I've had to remove all the books a couple of times, and I ran into the same problem you did once. Here's what I did to solve the problem:
1) Erase everything you've got on the card.
2) Put the card in the reader and turn the reader on. It may take a moment or two while it looks to see if there's anything on the card, but while it's doing that, it's also formatting the card so you can use it with the Reader.
3) Turn the reader off and take out the card.
4) Add books to your card using drag-and-drop in Windows Explorer. There should be a file marked "Sony Reader" on the card. That's the folder to put your books in.
5) If you want to add collections, then you would open Sony Library and add collections.
There's probably a simpler way to do it, but that's my solution.
