Yes, the rear lights on the docking station light up.

If both of the rear lights on the docking station light up solid, then that is actually a failure indication believe it or not. Only one of the lights should light up solid. The other light should be off most of the time and only blink briefly when data is being transferred.

The Karma's ethernet port has some kind of an incompatibility with certain hubs and switches, and this problem hasn't been solved yet. The indicator of this incompatibility is two solid lights on the back of the dock.

In other news... The errors you're reporting with the USB connection, even when upgrading the software, seem to indicate some kind of USB trouble.