Our camera's have fits with the larger of the two memory cards which we have.  I have never really messed with the problem, just been using the other card.. but just sat down with it.  I notice that the one which works is FAT, the one which does not is FAT32.  I can't seem to select FAT when formatting it.

Cards are 1gb (works) and 4 gb (causes trouble) and the cameras are sony cybershots.