Here are some great solutions in a similar thread:
http://androidforums.com/samsung-ga...-galaxy-s-i9000-mtp-application-crashing.html
Most common reasons for this issue that I've found:
1) MTP app issues from int or ext sd card containing file names with extensions longer than 16 chars (check out link for solution & little app to help fix
http://androidforums.com/1446922-post5.html )
2) Need to remount int or ext SD cards (see earlier post - thanks Geryatrix
)
3) Need to reformat one or both SD cards (usually internal)
4) Missing or currupted drivers (check out link
http://androidforums.com/1576152-post33.html )
These are all when the phone quick swaps between Home screen & USB connecting screen. If phone appears OK and Kies doesn't connect:
1) Missing or currupted drivers (check out link
http://androidforums.com/1576152-post33.html )
2) Need to update to latest version of Kies
3) Try different USB port
4) Check USB cable - USB charging cables don't always carry data as only 2 wires (1 pair) needed to charge - data needs more.
From what I've read the above covers/resolves vast majority of cases. If all this doesn't work I suggest bite the bullet and take it to a service centre. There are other possible reasons and solutions you can find that require rooting the phone, SD card partitions, other advanced user stuff. Making a mistake trying advanced stuff can majorly screw up your phone so why risk it? Just remember to change the USB settings on your phone so you can connect it as a mass storage device & back up your data first. (settings>about phone>USB settings>Ask on connection...then connect SGS to PC. Select the Explore option on PC pop up, go to your phones notifications pull down menu>select the USB connection notification. Then select Mount (like LiteNiteMike says above)
BTW: Factory resetting almost never works!
Hope this helps - GOOD LUCK!