I have the problem where when you insert your MD (Sony N10) into the cradle it doesn't register as connected, but then it will get stuck with PC->MD when you eject it. I looked for solutions on this board and around the web and didn't find any.
Anyway, I figured out was a sort of work around that might be useful to some people.
You probably know that to get it out of the PC->MD mode you can just turn the internal battery off and on again.
Now, to get it to connect to your PC again, put in the cradle without the power connected or just directly to the cable.
If anyone has more definate solutions, please do post.