N800, and bottom/external slot recognizes both large and mini/with adapter SD cards. Put same cards in internal slot and device says no memory card installed.

Do I have defective unit or is there a command/switch somewhere?

Have you checked to see if the magnet on the cover is missing? I had mine go missing and it caused the same problem. The N800 uses the presence of this magnet to indicate when the back cover is on and only initializes the internal card slot when it registers the cover as being closed. Try waving a powerful magnet over the backside of the n800 and see if you get "memory card detected" on the screen. I ended up epoxying a magnet from a pair of crappy earbuds to the inside of the back cover to fix mine.

Welll, blow me down!

I was trying it back and forth without back cover on. Now it works fine. I had no idea the back cover had a magnet.

THANKS!