Out of ideas
I got my wife a Hero for Mother's Day (my first Android experience; I'm a Palm guy since the HS Visor), and I'm trying to get the contacts from her Centro (palm desktop) loaded up. Having the same problem with the phone not being recognized on windows desktop (XP 3), and windows trying to "install" it over and over. I plugged it into a Mac laptop, and the USB symbol appeared on the phone (and I did see it earlier when I first plugged the phone in to the windows desktop to charge), so I don't think it's the cable.
HTC sync (current version) installed, but does not find phone.
I went into device manager and uninstalled "android phone", UNchecked USB debugging on the phone, plugged it back in, and the USB symbol shows up on the phone again (top left). It also shows up as "generic volume" under "storage volumes" in device manager, and it is accessible in "my computer" when I select "mount" on phone (top left pulldown). Then I select HTC sync, add new hardware wizard comes up, I lose the USB icon on the phone, and HTC sync still doesn't work.
Any thoughts welcome...