Make sure you go to menu>settings>wireless and networks>USB utilities>connect to mass storage before you actually plug in the phone. Once you select that, you'll be prompted to plug in the phone. Then it's pretty much business as usual.
Go to Settings--> Applications--> Development--> Check USB Debugging Mode.
Also, I do agree that Samsung Kies Air is a pretty buggy program that is hard to use. I recommend Samsung Kies program that you download to your desktop and sync via cable. It is pretty neat, and a lot more easy to use.
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