Pics taken in Sony Cyber Shot DCS-T1 becomes smaller on preview.

It si problem of ccd imager chip that is defective in your camera and need to be replaced by camera technician because camera will take apart.
Hope this will help.

Yes. The maximum size memory card you can use in that camera is 4GB
(of course you need a sony memory stick pro duo) no other cards will work.

thanks for asking!

According to the users manual, the camera does not support above 512 MB cards, however I noticed that there is a firmware update which might address the issue. Go to www.sony.com and support, electronics. Put your model number in the selection box and you'll be taken to the drivers download page.

Format your memory card, card has become corrupt

The problem sounds like it is due to a problem with the memory card. Try a new card, if the problem persists, the camera has a problem.

Couple of questions..
Does camera show live view correctly on LCD to take picture?
Does camera playback old stored pictures in memory card properly in LCD?
Let me know to find out problem in DSC-T1

NO, DSC-T1 will not accept such big memory card as its hardware supports maximum 2GB card memory that is more then enough for it because its 6 mega pixel camera.

Hi.. I think you have solved the problem yourself... replace the adapter with a memory stick... You have eliminated the micro sd card as bad... now try a new known good memory stick..

Thanks
jim

DSC-T1 model has no internal memory and it requires memory card due pro to store pictures.

If its DSC-T1, Sony cybershot, you can download pictures in to PC, from memory stick by using compatible Card-Reader.
I cant understand CAF...sorry.