I have this same issue... I've tried the manual file fix above and no luck. I had this problem when I first got the Pod HD (desktop) but after doing a Windows 7 update it fixed itself. Now I am trying to reset it with the factory sounds but the same issue has come back.
The unit works perfectly for everything (creating, editing, saving sounds, recording etc etc etc) and I've been using it daily for over a year now... That makes me think it's a compatibility issue with my laptop, something to do with the USB posts I suspect... I'm going to try and borrow a friend's PC to test it on.
Any further ideas?
