Posting in the hopes that Google will help others fix this problem:
Ditch the USB cable that comes with the camera. This camera is VERY sensitive to cable length. I swapped it for a two-foot cable from some old device and it worked fine.
If you’ve already got the camera in USB mode and it’s failing to connect with the supplied cable, you’ll have to pull the battery to get it out of USB mode. Try with a shorter cable (connect the power adapter first) and you should be golden.
It’ll mount as a removable drive, and the movies are in SD_VIDEO as PRG001, PRG002, etc. They’re in MOD format, which mplayer/mencoder can handle just fine.
Or if you want to get fancy, you can always use Kino which has no problem importing them.