Problem is that the IR LED doesn't effed whatsoever on the phototransistor
when I COVER the phototransistor I get a reading of about 200-300, when UNCOVERED i get a reading of about ~900
It sounds like it's working to me?! I presume this is in a dark room since you later said:
when I turn of the light in my room, it drops to 0 as you said.
??? :-/