Try this solution that was previously posted on FixYa:
My daughter just received one of these camera's for her 6th birthday and is extremely excited. I am running Windows XPand was getting the "No pictures on camera" error. I tried downloadingthe drivers for this but that did not work. Here is what I did to getthe camera working:
1) Connect the camera with the provided USB cable.
2) Download the latest driver from the Digital Blue web site: http://digiblue.com/customer-service/downloads/index.html
, select the "The Disney Pix Micro Drivers for WIN ME, 2000, XP"
3) Install this driver, this will not enable the camera to work yet.
4) After this driver has installed, go to Control Panel
5) Select System
6) Select the Hardware tab
7) Select Device Manager
8) Find the device in the list (mine said "USB Digital Still Camera"),will probably have the yellow exclamation mark on it saying that it isnot working.
9) Double click the device
10) Select "Reinstall Driver" from the General tab
11) When asked if Windows can connect to Windows Update to search for software, select "Yes, this time only" and click Next.
12) Choose "Install the software automatically" and click Next.
13) You should get a message saying the driver for the "DB CIF Cam" hasnot passed the Windows Logo testing, select "Continue Anyway".
14) Click Finish.
15) The first time I did this, I needed to take a picture while the camera was connected to the PC.
After doing this I am able to download the pictures and everything works great.
I hope this helps.