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To initialize the new XD card, you go into the camera's setup menu and navigate to the format function. Format the card and you might be ready to go. If your new card has an "M" or an "H" preceeding the XD, your camera will need a firmware upgrade before it will recognize the card. Here's a link to the firmware upgrade procedure. http://www.fujifilm.com/products/digital/download/a340/fupd.html
Try opening your My Computer screen, connect the camera to the computer
and watch for the new removable disk to show up. Depending on the
camera there may be two that show up. Right click on the removable
disk/disks and choose format, click start and click okay. This should
fully reformat the memory and you'll be able to take pictures again.