Furthermore, the device shows up in the Device manager but it doesnt show up under the Portable Devices folder in the Control Panel. It does not show up in My Computer either.
What else do you have that uses drive letters? I have seen dozens of MP3 players and USB drives that keep trying to steal a drive letter that is already in use. The symptoms are just like those you describe, where it shows in device manager functioning properly but no where else.
If you have something that is using a drive letter it wants (like a CD-ROM, external HD, or mapped network drive) you can change the drive letter in disk management or assign your mapped drive a different letter.
For example if an external hard drive is using F: and your MP3 player wants F: you will need to go in and change it to make it happy. Maybe the hard drive to G: or H: to let your MP3 player have its way. Just an example anyway.