My 505, and Calibre recognising it. can be a bit dodgy. I have found that some of the USB sockets on my laptop work better than others (no idea why) so try swapping it around a little.
When you connect the cable, with Calibre running, you should get a pop-up from Calibre saying something like "Sony Reader found" and the SD card and reader itself appear on the Calibre main screen.
Hope you get it working - sounds like you got an absolute bargain