Zund HD is NOT recognized by the 4.0 software. Help?

Hi there, 

Here's my situation:

I am on a Windows XP computer. I've installed the 4.0 software. I now want to sync my device. So I plug in the Zune into the computer and the computer recognizes the Zune being plugged in. But when I go to the Zune 4.0 software, the software doesn't recognize it and it tells me that it's not connected. It shows me this: (link to screenshot -->)

http://i37.tinypic.com/27y98uf.jpg

Then it tells me that I need to update the device, so when I click "Accept" to update it, it gives me this error and it doesn't update. So I'm stuck and can't do anything with my new Zune HD!(link to screenshot -->)

http://i36.tinypic.com/dos8xf.jpg

Can someone please help?

Yes my computer recognizes it. 

But the Zune software does NOT.

=( 

It shouldn't be locked b/c I can do things. But anytime I click on something on the Zune it says, "To continue, sync your Zune software to your PC."

....But it's already in there...