Anyway I found this little nugget of information in the Skate forum, which may be helpful to other people here... you need to go to My Computer and eject the virtual CD drive that the phone creates when you plug the USB cable in. Once you do that adb will magically start working! Maybe this is commpon knowledge but I've been tearing my hair out for an hour trying to get this to work!
It seems you only need to eject it once. It doesn't seem to appear again the next time I plug it in.