So, I bought this Olympus Camedia C3020z. Mostly a nice camera. To go with it, I bought a 128MB smartmedia card for around $100.
I formatted the card in my PC using a smartmedia reader after my first use. Despite the fact that it was easy and even natural to do this (I think I was even prompted for it), this was a mistake. Apparently, an unrecoverable one -- according to Olympus, you can never recover the original format of the card once you've formatted on a PC via a reader. That card works fine, but neither the camera or the bundled software can recover the format required by the camera.
After *much* searching, it appears that if I could write out a nice 128MB FAT12 filesystem (an odd combination to say the least), the camera might be happy again. So far, no luck finding the magic combination of tools, drivers, and operating systems that allows me to do this with my current hardware.
I'm trying to imagine what would make this an acceptable state of affairs for Olympus to subject their customers to this. At the very least, they should have had lots of flashy red warnings on the camera, the manual, and the box they came in.