Check out my dealings with this problem in my post on the Bug Reports forum.

First thing you want to do is see what is on the serial output when the player starts up. Then you will probably have to delete the playlists, tags, and database files in /empeg/var and do a sync in Emplode to re-build your database.

Also as I found out last night, if you've got two hard drives and /drive1 fails, this can happen. /drive1 might be unavailable due to a loose cable (in my case) or if you're using the Hijack kernel, if you select the "one drive" option.

Please keep us posted on how things go, as I'm curious as to if this is a bug in 2.0b7 where the database somehow gets corrupted or something.