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.