It's hit and miss with regards to sync. The first time I tried it on my laptop running both Windows 7 and Vista, the device wasn't recognized. However, when you have it working you don't have worry about the device not being discovered. Here is what I did to get it working:
1) Settings: Unmount SD Card
2) Plug in Magic to computer
3) Windows will start looking for drivers...takes a long time
4) After it is done searching through driver database, it will either tell you the device cannot be installed (in which case you should reboot your computer or factory restore the phone) or will tell you that there is a component missing (most likely ADB driver). In the second scenario, your phone will you give you a notification to mount the sd on your computer (first time this happens phone will tell Windows where to find the driver).
5) If step 4 worked, you should see the SD Directory in Windows Explorer. When done MAKE SURE you safely remove the sd from your computer (just like a usb drive) before ending the USB transfer on your phone, otherwise any data you have stored may become corrupted.
I haven't tried this on XP, but from my experience Windows 7 in its beta builds struggles greatly when trying to sync to a multimedia device. My iPod touch always freezes my entire desktop or iTunes times out when establishing a data transfer. I would try it on Vista, or if your can't, take the microsd out of your phone and use an sd adapter to read from your computer. Message me if you have any questions