I used Superoneclick. Far easier. The computer always saw the phone card.
When I first rooted, I found out you have to reboot everything after the last step or your computer won't see the phone.
I almost missed how to update - the instructions were ambiguous.
You should really get that reader and check the card. I've had to reformat cards since they wouldn't work after an update or upgrade. I had to reformat the card after Gingerbread. Ringtones and photos went haywire.
You can only access the phone (not the card) by USB unless you are using the main Kies, not mini Kies. USB usually only transfers to storage, meaning you can drag and drop from the computer. Once you get the phone rooted /connected you should have better options. Even main Kies only does file TF from phone. It's as bad as Nokia's Ovi.
If all else fails - I'd try googling Odin and see about restoring phone and starting over from square one.