Try ADE v1.7.2.
V2.0 has lots of bugs and is not compatible with earlier versions of XP.
One of the bugs is that the ADE2.0/Overdrive/PRS-350 combination does not work,
and I belive it is broken for other Sony readers too with V2.0.
Version 1.7.2, it is a little difficult to find, available on Adobe site for Windows and for Mac.
http://helpx.adobe.com/digital-editions/kb/cant-install-digital-editio ns.html
The forum software is sometimes corrupting the link above. There shouldn't be a blank in 'editio ns.html'. The following redirects to the same page: http://tinyurl.com/diged172