"I had the same problem about 2 years ago. I sent my N1 to Sony, (I live in Peru, imagine the hassle)..." I also live in Perú and wasn´t able to solve my N707 problem. At first it showed gaps in songs recorded via optical in, but recording via USB was fine, but suddenly I can´t record anymore. I tried two different computers, different version of SS (3.3/3.4), simple burner and I keep getting the "unable to record..." mesage. The recordings stars fine but then it halts (around 50-60% progress), I think the problem is when the recorder tries to write. Took it to Sony technical service where I technician said he will take a look to it, but I don´t expect too much from him. I have to decide to stay with minidisc (HI-MD) or go to a flash based device.