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With a PC running XP I see Reader Library.exe running in the task manager and that's about it. My PRS-700 shows that it's connected to the PC, but Library does not open. I have to use Calibre to see what's on the reader, and even that doesn't work all the time. I had the same problem with 3.0.
While I like the reader, I find it amazing that a company the size and reputation of Sony can hose up something like this so consistently. I've been through several generations of iPods and never once had an synch issue.
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