The DCS-760 uses SD cards. As you've discovered, SDHC cards do not work in it. SD cards max out at 2GB.
You'll probably find that it's the HC part that the camer doesn't like.
Try it with an ordinary 2GB SD card. I bought an SDHC card and found that my camera couldn't use it - nor could my card-reader read it. I had to buy another card reader. I'm using the card in a video camera now and have bought a bunch of ordinary SD cards for the camera.
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