Hi, "Canoe" -- thanks for your registration!
The first problem is pretty easy: take a look at the FAQ entry
here, which should answer your question -- basically, since the default is to copy everything, adding "additional" folders doesn't exclude anything. You have to ignore "*" and ".*" first.
The second isn't anything I've seen before: I can't see how SD!, by just copying files to a drive using system calls (which is what we're doing), can make the drive unrecognizable by the system... can you see it with Disk Utility?