I'm using a Transcend 128 MB SD card. I chose it because of the advertised higher speed. Not reformated.
It works great (2 months now), except
1) if inserted while Zaurus running, Zaurus halts
2) if inserted while Zaurus suspended, recognized on SECOND power cycle -- never first. (can this card recognition be tweaked?)
It was from digi4me, located using pricewatch.com