Your problem is in trying to mix and match old and new technology.
Your camera can handle SD cards up to an absolute maximum capacity of 512MB (as per page 21 of the user manual). It's incapable of operating with anything of a higher capacity and totally incompatible with the SDHC card you appear to be trying to use.
Your only fix is to either limit yourself to 512MB maximum capacity SD cards, or to replace the camera with a modern SDHC compliant model which will accept your new card.
I hope that you have found my free reply to be clear and useful and that you can take a brief moment to rate my answer.
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