What model do you have? I have the SLVR L7, and just plugged it in and voila. The 100 song limit is a bit of a bummer tho!
I also started up iSync and it instantly recognized the phone and now have the Address Book and iCal syncing quite nicely..
As for your problem, possibly because it is older? Make sure you get all the iTunes and osx updates. I don't know if this made any difference, but I have the 'enable disk use' checkbox on in iTunes, but that was after it recognized it.
Another thing to check is to use a powered USB port, since it is used to charge the phone. Try the USB right from the machine, not the port on the keyboard... and use the cable that came with the phone (some cables don't support the powered connections). (;
Hope this helps!
Cheers,
Curtis.