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I'm using a Jornada567 PocketPC and it displays all of the folders including the ones on my storage card. However, when I tap on one of the boxes on the storage card nothing happens. I can't select anything on the storage card for backup.
Please check your backup options. This sounds like the option to exclude persistent storage (i.e. storage cards and IPSM - "hp safe store", "iPAQ File Store") is turned on. Uncheck this option and you will be able to select files on the storage card.