the player is runnign version 2 and I just downloaded the latest Emplode (2), I performed the proper driver install as per release notes

Assuming you really installed the latest emplode as well (not just the new driver), then this should work. What does help/about in Emplode say, and what does About say on the player? Does the USB port on your computer really work? In other words, do you have other USB devices and do they work right?

Is there anyway to get it to delete the file if the playlist entry you delete is the only existing instance of that file?

It has the little check box that lets you do that, is that what you mean?

If you mean to have it ONLY delete the file IF the playlist entry is the last thing, then no, it doesn't do that in 2.0. You need to either check the box when deleting, or go to one of the soup views.