I had a similar issues trying to use 1GB cards on my old card reader. It turns out that xD card readers at one point could only read up to 512MB cards with various card readers.
I got an Olympus MAUSB-200 card reader that I tested with a 2GB xD card and it works although I usually use it with a 1GB card. It takes 5 minutes to upload a full 1GB card to my laptop.
Hope this helps