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The Batteries in these units like all rechargeable batteries only have a certain number of times they can be charged and discharged before begining to fail. Your only option is to replace the battery with a new one. They are cheap to purchase off eBay and YouTube has Videos detailing how to change them.
Sounds like a built in glitch ... You might want to take it back under manufacturer's warranty and get a completely different MP3 Player/iPod, because it sounds like a scamming item - for $400 I'd demand answers.
It may sound a bit cheeky, but I find reputable models, like Goodmans, JVC and Sony work without a problem, and buying cheaper models with mass GB space would seem a bit too good to be true.
Sometimes when the Gigabeat's battery dies out fully with no life in it, you cannot recharge it via USB. You must use the AC connection to charge it. If you do not have the original charger, you can use a Sony PSP charger.