Murphy's law! Shortly before I started fooling around with this mess, the drivers that sensed the USB plug-in got corrupted. Once GeekSquad fixed the driver problem, everything worked. By the way, as I expected, there is no relationship between downloading photos and iTunes. If iTunes was not open, the download would still work fine. In our case, since iTunes was kept open all the time, it also sensed the USB plug-in and started to do its thing, at the same time the photo download was taking place -- causing some unnecessary assumptions. Now we keep iTunes off unless we're using it and everything is good.