Well, I don't know why it's busy. But my approach is to have a big (16GB, for now) internal card, and a small (128MB, came with) external card. I use the external card for files I might want from the computer.

Been doing that since OS2007, when I had no problems with the internal card, except when I was playing music from it. So I changed for convenience's sake.

Regarding 'SDHC does not work, all other SDs do', I suspect it's a case of an SD (not SDHC) adapter. So you won't be able to format it in Vista. I don't see any reason to suppose there's a filesystem problem here, just OS2008 doing something dumb.