fungus:
Can you try a different card and see if it works?Different SD cards need different voltages. You're supposed to query the card and ask it how many volts it wants when you connect to it but the SD card library is a bit loose on that part of the protocol (IIRC).
I've tried three different ones now. 1GB, 2GB, and 4GB (class 6)
They are all formatted with FAT (default) and default allocation. I also tried FAT32 with default allocation. No dice.