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Havent updated yet..so i still have it, I have a weird feeling it might allow usb tethering.not sure what it was for but its gone if you update 8(

You may try using the "eject" botton that pops up as you mouse over the phone icon in the right corner. After you disconnect close Kies. Then try plugging your phone in and let your phone launch Kies. Also check the options in the left corner and make sure the option to have the phone launch kies is enabled. Hope some of this helps.
BTW are you running version 1.5.3?