So it's a 1-slot reader, the only possible insertion error being wrong way up or not far enough - but it seems that it is detecting something, and not just reacting as if it's empty.
What operating system? USB support in 98 first edition was rather poor, but anything from 98SE onward should not be a problem.
Clutching at straws now, I'd say try another USB port - if you're using a case front USB, try moving it to a rear plate port.
Have you actually taken any pictures to it? - is it 100% working in the camera?
I'm beginning to suspect that there may be a hardware fault.
Is the camera download working?
PS. My own setup is a Kodak DX3700 with Easyshare base, with a Crucial 64Mb MMC in the camera, and a Kodak 32Mb MMC spare (I got the extra card, after I ran low one day, and had to pop the 32Mb card when full, to use the 8Mb in the camera)