You can use VirtualPC (PowerPC based Macs) or Parallels (Intel based Macs) to talk to the Karma and update the firmware. Adding music to it either has to be done on Windows as well in the VM programs, or using ethernet. Since plugging the karma in didn't work, I'd suspect the problem might be that the cable is too short. Last time I tried to directly connect my Karma to my Mac, I had to use a 50 ft cable, due to a rather odd issue with the Karma ethernet controller. If your Mac is recent enough (2002 or newer), it shouldn't require a crossover cable, as the Mac will take care of it. Or as others have said, plug the Karma into a router or other network switch.

Did any lights turn on next to the ethernet port on the Karma dock?