On windows, because of it's inferior architecture, you cant have more than one set of USB drivers for a single device working at one time. Thus if you have connect working, libprs500 wont work and vice versa.
@jswolf: Newer versions of libprs500 automatically uninstall the drivers when it is being uninstalled, so as long as you uninstall each time before installing an upgrade you wont get a buildup of drivers.
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