Which phone are you using? I have the HTC Incredible. When I plug it in the phone prompts me to "mount the sd card" or use it as an external drive.
If I miss the pop up notice, then I can either mount the card through the status bar at the top of the phone's screen or through the settings menu.
Once mounted, I am able to view the phones memory card though windows explorer.
If anyone is still having this problem (and I'm sure that's the case since I just had it!), I found this fix, which doesn't involve installing or rebooting anything.
While your device is plugged into the PC, on the PC right click on my computer, go to properties then choose device manager. Open up Universal Serial Bus Controllers and you will likely see an error icon on at least one of them. On those, right click and hit disable, then when it's done right click again and hit enable. When you get to the one that correspondes to the port your phone is plugged into, it should reset and perhaps install drivers. Now it will recognize the phone as a USB device.
Hope that helps.
Ugh, this took me two days to figure out ... I'm already bald so I didn't have any hair to pull out but I tried!
So I messed something up and my computer stopped recognizing my droid 4. I found an article about setting up your phone for usb and it mentioned going to System Settings->Storage->USB computer connection. So on my phone that is the 3 lines button on the bottom left of the phone's face, aka Menu Button, then select System Settings. Then scroll down to the DEVICE section and select Storage. Then hit the 3 lines button (Menu Button) while in Storage and it pops up with USB computer connection at the bottom. After selecting that, I then select Media device (MTP) but I could've selected Mass Storage or Camera if I felt brave
Worked for me, hope this helps someone else.