Help connecting Panasonic Lumix DMC-FH20 to PC!?

I took some pics on my new camera on the internal memory of the camera, but when I connected the camera to the PC (Windows XP) it just kept saying "connecting to PC" and wouldn't do anything else for more than 20m.

I installed the CD and ran the PhotofunSTUDIO 5.0 and opened it, and it wouldn't list any copy source drives when I clicked "copy to PC".

I deleted the pics on the cameras internal memory, and installed the SD-HC card (it is an SD-XC camera, so this should be fine). But the camera is still taking pictures on the internal memory.

How do I get the camera to record on the SD card, and how do I get the camera to put the pictures I take onto the computer!

I have an SD card reader coming, it isn't here yet. But whether or not I need that, I first need the camera to record pics onto the card! Why doesn't it know the card has been inserted?

Please help, the manual isn't helpful. It just says to plug in the camera and doesn't say it will simply say "connecting to PC" and not progress. Same with the card, just says put the card in the camera.
Okay, I pushed the card in all the way, and that solved that, but I still get "connecting to PC" and it won't progress... do I have to wait til my SD card reader arrives?
It was on, and in playback mode. :( The camera lights up, says USB mode, and it says connecting to PC... and there is a wavy arrow pointing up and down. But it just stays like that. My computer doesn't react to it at all.

It is plugged into the computer by the USB cord they provided.
 
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