Under the "Auto-conversion" tab you probably need to set FLAC as a compatible format for your card.

This post is old, but I don't see why SD cards couldn't use Flac. The only problem I'd see is they'd fill up quick.

yeah, i have been having the exact same problem.
also, do you know if sd cards wwill accept the flac format anyway?

Anyone know what's going on?

For some reason it's not copying to an SD card.

When I do Auto-Sync it shows the progress bar like it's copying and converting, but when I go the SD card, nothing is there. I'll make the initial Music folder, but that's it, no MP3's.

I have the same settings for my Compact Flash card and it works fine. I have it set up to copy MP3's and have Flac set as incompatible so it'll convert to MP3's. I have this for my "Sync tracks to":
\Music\<Album Artist>\<Album> $if(<Year>,[<Year>],)\$if(<Track#>,<Track#>. )<Title>

Any help?