I am in the same situation as many others. I bought your product will full expectations of being able to record a lecture and be able to upload that lecture to my PC but to my surprise, NOPE.
I have always been a supporter of Sony but this time I think you guys really dropped the ball. Since the largest majority of copyrighted audio on the market is in CD format (with the exception of some leftover people of the 70's and early 80's still using tape and vinyl), the flooded market of CD rippers are used to extract that data and store them on the PC. Also, with the file sharing resources available like the highly publicized Napster, the intention was still to store the files on the PC.
To that end, I cannot realistically image that many if any would actually use the MD recorder to originate copyrighted material. The only exception I can think of is when MD's were first released, there were prerecorded selections available. My local store that sold them stopped quite a while ago so I don't even know if they are sill being produced.
So let us recap. The possibility is higher that the data being stored on the MD via NetMD originating from the computer is pirated than the data originating on the MD and being uploaded to the PC.
Being a programmer myself, I cannot believe that this simple realization did not come up in any of your war room meetings (that is what I always liked to call them) during the initial design of this software. Or maybe it did and was dismissed. Either way, the decision was very poor and desperate needs to be reanalyzed or you may end up losing my of your supports than you think. This one included. Blowing $225.00 on a non-usable product but a vendor is not how I like spending my money and if you pull a shenanigan like this on one product, who knows what else you will try.
In conclusion, please reconsider your position on this matter. Appease your client base because we are the ones that keep you in business.