I see, so you're recording it live (capturing) & not really transfering a file as such.
I would seriously recommend getting a larger memory stick to save you time (you can pick them up cheap on ebay) as you would only have to copy/cut the movie file as apposed to playing the camcorder back/capturing it in real time (but you I'm sure you already knew that).
Anyway, if you would like to transfer video from the cassette to the memory stick, it's page 91 of the manual (dubbing selected scenes from a tape) you can get the manual from
here.Still, we need to sort this capturing from the cassette business out.
If when you attach a device & you get a 'found new hardware' message, it could mean that you don't have any drivers installed for it.
Did you install any drivers from a CD that came with the camcorder or anything? Amazingly, there is nothing in the manual about connecting to a PC (what I can find atleast).
I found the drivers
hereInstall the drivers and then connect the camcorder, then try to capture again.
Good luck