USB Mass Storage device seen but asks for disk to be inserted

Ok I have a USB memory stick. I plug it in and XP sees it and gives it a drive letter. I try to open it and XP prompts me to insert a disk into drive E: (correct drive letter).
I found on forum where they suggested using killdisk to blow it away and retry, but when I run that it gives me a bad or missing command line interpreter error. This thing is a datace 2.2 gig drive. I think it actually has a IBM gs-magic stor compact flash card in it with a usb interface (as that is also listed in the remove device selection area now). Any ideas?  I have 2 of these things and the other one seems to work fine. I did try to format this one but same thing and asks for disk to be inserted.