New xd cad not working.

According to the manual the D-560 can use xD cards from 16MB to 256MB.

the reason why you have that error is because this camera will only support up to 256 MB of memory card so the 1 GIG wont really work with it....

The problem is that the largest xD card that your camera can support is an M or H 512mb card. The 1gb card is not compatible. The firmware in the camera cannot support memory storage with that capacity. The camera came out before those cards did and there no plans to upgrade the camera to allow those types of cards to be supported.

The problem is that the largest xD card that your camera can support is an M or H 512mb card. The 1gb card is not compatible.

Is that card compatible with that camera. They make HD (high definition) cards (4gig and above) that will only work with newer camera's. Of course, i am speaking of SD cards. But the XD may have a similar feature.
That is the exact error i got when i tried to use an HD card in my 5 year old camera.
Try downgrading to a smaller memory card. Also, is that memory card exactly as the one you have had prior to this?

I hope this helps, I called Olympus for the exact same reason. The tech told me that the highest for the older D560 was 512mb. The other DX cards are for the newer models (same name!) that are 3D etc. effects of the newer models.

this camera caanoot support any xd card which says m or h.
the maximum card supported in this camera is 256 mb but make sure it doesnt say m or h.

Firm ware update if available.

Seem like its a dud card.
There have been problems with XD card I hear
checkout Sandisk and Olympus support.

I do, it works fine but if you want to use the panorama function you have to have the olympus brand card.