Yep, I had to reformat the memory. When I plugged it to the PC Calibre didn't recognise it neither did the reader library.
So I unplugged it, format memory as explained above, and it worked like a charm. It deleted the files (books, pictures and songs) I had in it but then I was all able to load everything without a problem. Thanks for the tip!
I just bought a new cable with a USB and PSP charger sockets, this way I can use it with the Ipod charger. From what I've gathered around here you can't connect a reader to a PC unless the Sony software is installed.
Lesson learned!
m*