I've just bought a couple of these, not knowing what problems were waiting for me. I've just been fighting with them for a couple of hours and basically had every problem described in these forums. I think the real problem comes down to power supply.
a) SD cards need up to 3.6V to operate - more than the Arduino 3.3V pin can supply.
b) SD cards need a surprising amount of current to work. Add to this that you're also trying to drive a 4W speaker (or whatever) and you'll soon overwhelm a little voltage regulator.
The voltage/current needed by a card obviously varies between cards which is why some cards work better than others. Using an external amplifier probably helps a lot, too.
In my case I was getting nothing at all with the Arduino 3.3V supply. I tried the "two diodes" trick and got sound, but the files only played for a couple of seconds before stopping. I looked at the voltage and it was going up and down wildly. There was usually a drop down to about 3V when the sounds stopped playing (probably low enough to give SD card errors...)
As a test, I tried using a 3xAAA battery pack, and ... bingo! Everything started working perfectly. The batteries were putting out about 3.8V and not drooping too much when things got busy.
Bottom line: I think you need a fairly beefy 3.6V supply to run this thing properly (or a reasonably good 3.6V supply plus an external amplifier).
First off, Thank You!
Ordered one off the bay. I was worried about this board not accepting an SDHC so I got a 2GB SD standard capacity. Went through the usual trials of formatting and file specs. Still did not work. Surfed the web and everyone says the same old same. Till I read your comment where you mentioned current consumption of the SD card. I know I read something about 100ma to 300ma to power one of these cards in the SD specifications and it hit me. My programmer cannot source that much current. Went to battery supply and BOOM it worked just fine.
For me a 3.3v to 3.7v line voltage looks very clean on a scope when attempting to use the WTV020-SD module. Yet the module busy line would flicker a few pulses and end. Still no noise or voltage drop on the scope. Raised programmer to 3.9 and it works but just barely. Did a current reading and I get spikes up to 300ma then levels off to 100ma during playback. Them 300ma spikes must be during buffering.