Continuing the saga....
yesterday I tried with a 8GB OCZ. works fine.

So the score at the moment is:
works with my 512 MB Transcend.
works with friend's 16GB Corsair.
works with friend's 8 GB OCZ.

Does not work with my 8GB Corsair.
I also tried using a USB hub and found that the Philips HT does not detect any drive connected through the hub.
Corsair support seems to think that I have nothing to complain about since they claim it to work on a Windows or Mac computer.
I feel cheated because I feel my problem is caused because of Corsair's non-standard implementation.
All those who are considering buying Corsair be warned that your drive may not work if you try to use it with anything other than a PC.