Hi Tony, I've done successful recordings to a PC with a similar spec to the one you mention, using Win98SE, so I doubt if that is your problem. Might be worth re-installing your USB drivers and if you have another USB device, testing the port. However, as I have mentioned several times on this forum, I don't use the Panasonic recorder for recording from KN7000. I use a digital audio editor called Goldwave. The main reason for this is that recording from the KN7000 via USB always seems to produce an insufficient level for transferring to CD, so the level really needs to be increased before burning a CD. Since this has to be done, it makes sense to use a single program, which is capable of both recording and optomising the volume level, before saving to disc, either as .WAV (for CD) or MP3 etc. There are several other digital audio editors available but I have found, in common with some other forum members, that it is a relatively easy to use and comprehensive editor. A fully operational evaluation download is available free from Goldwave.com and it interfaces directly with USB.
It may be of iterest to you, to read the following thread.
http://www.synthzone.com/ubbs/Forum25/HTML/001328.html Hope this helps....
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Willum