wompah1, my assumption was that you may have a dodgy memory chip as the problems you are having are good indications of this. There was a great post here a few days ago that covered one users experiences about his 8gig player really only being a 2gig player but I can not find it to link for you.
He spoke of the fact that FAT32 is utilised to achieve this . To find the true size of your player you need to open the player and note the brand and serial number of your memory chip (usually the largest chip on the board). With this info you can do a Google search which will find you information on your chips real specifications.
Hope you get it formatted alright.
EDIT: found the link
http://www.mympxplayer.com/viewtopic.php?t=424