Hi, anyer and Gordon.
I think a number of us xD card users have been where you are. I will go through my experiences to see if it will help you, but I'm not out of the woods myself yet. Go to the bottom for suggestions for your plight, but what comes in between may have some relevance.
I had a Fuji S3500 from 2004 and operated it for two years with no problems. One day I went into a store and through I'd get a card of bigger capacity than the ones I'd been using (512mb in this case). 128mb seemed a lot when I bought the camera!. Soon, the camera was displaying messages that there was a problem with displaying card information. What had I missed? Well, xD cards changed some time after I bought the camera from the simple "xD" to "M" and "H" versions. These later versions don't work with some earlier cameras, although mine wasn't on the lists I saw. I bought a card reader but it made no difference.
In September 2006 I bought a Fuji S6500fd (mentioned in some other posts here). Excellent camera, wonderful photos. Everything was good at first, until the computer displayed the message "door is open" when I used the 512 card and the card reader. I read that 512mb cards didn't like movies sometimes so I bought a 1gb card - and the same thing happened, except this time the message "card not initialised" came up and I couldn't access the 400 photos I had on the card (I had them professionally retrieved, but that's another story). Bear with me - the conclusion is coming.
The card reader was blamed, and Fuji told me to format the card EACH TIME I cleaned the images off it. And they claimed that the Olympus cards I was using might be a partial cause of the problem.
Things were OK for a while, then the problems cropped up again when I was using an "old" xD card in the 6500 - opened up on the computer, it claimed it was empty. No such problem with the 1gb card, except the computer hung if there were stills and videos on the same card.
I also had problems with the Finepix software launching uncommanded when I attached the camera (not every time, just sometimes). And the Finepix software is terrible for downloading - slow and it renames the files. But you need it if you are doing RAW, because other programs read the Fuji RAW files as empty (on my computer).
I tried another computer without the Finepix software loaded, and no downloading problems at all (yet). I am about to de-install the Finepix software on my main computer to see if it makes any difference.
What are the conclusions?
1. The xD cards seems to be a poorly implemented product
2. There are card version and camera incompatibilities.
3. Finepix software has problems
So, I have had the experience of a fine camera ruined by poor peripherals. Exen Fuji is going over to SD cards now - there must be a message in this.
Recently I bought, as a walkaround, a Canon A570 and one of those SD cards that plugs straight into the USB slot of the computer. Wonderful, faultless information transfer. A DSLR purchase is not so far away and SD cards will be esential.
As for your problem, it would seem that a protection facility in the card has been activated. It took a trip to a specialist store for me to get my card working again after this - and it wasn't easy for them. You might consider this option (I also found problems trying to format xD cards via the computer). Also, consider the usefulness of Finepix software if you have it installed. I don't think the camera manufacturers spend a lot on their software. You might also check camera-card compatibility. Are you using Olympus or Fuji cards?
From then on, I would recommend downloading to a computer with no Finepix software, formatting each time you deleted all images from a card, and using cards that were made at about the same time as the camera.
Hope this is some help.
There seem to be facilities built into the cards about which we are not very well informed.
Nikon DSLRs, film cameras from Leica to Linhof