[link|http://www.memorystick.com/en/lifestyle/music/tech02.html|Magic Gate] is Sony's copy protection stuff for music files, etc.
It sounds like either a switch was set, or the Memory Stick thinks the content should be protected. I don't understand why it won't let you erase it though. I also don't know why it would be applying it to your own .mp3 files (which presumably aren't intentionally copy protected).
HTH a bit. Good luck!
[edit:] Oh, another thing. 2 GB is very large. Could it be too big for your device(s)? I don't know that that's a problem - it's just another something that you might want to check.
Cheers,
Scott.