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Alright, I just made a CM7 SD card. With the card in, I booted into the stock B&N operating system, then plugged the cable in. My computer recognized the Nook and the SD card, popping up windows asking what to do with each.
When I boot into CM7, you have to go through the steps I described above. The message at the bottom says "USB connected" and when you touch it, it goes to the black screen and the button reads "Turn on USB storage".
I'm not sure why you "never could see your card". You didn't say what type of computer you have. If you have a Mac, you're on your own.
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