Mine did a similar thing, I had tried it in different computers with different OSes. At one point I had more luck with Win98 than I did XP (you need drivers for 98). In 98 I was able to get all my files off of it, and reformat it. 98 could still read it but XP still had problems (remove hardware knew what drive it was, but windows explorer didn't). Then I tried to fdisk from the dos prompt in 98, and I don't even know if you can do that, but it locked up the computer when I tried to change to the drive letter. Anyway what eventually happened was I kept trying it occationally on an XP machine, when I finally got it recognised I tried to format it again - When I did this, I noticed it had defaulted to FAT rather than FAT32. I changed it to FAT32 and its been working fine again now. I've used it pretty hard for about 2 weeks since and probably transfered over 15 gigs of data with it.
Edit - People may try and tell you to go to disk management and delete the partitions and re-create. I'm not sure if other pendrives could do it like that, or whether mine couldn't because it was messed up. But in any case that option was greyed out on my drive (Cruzer mini 1.0GB).