I've used a Sandisk Ultra II 8GB card since I bought my D50 earlier this year and have not had a single problem with it.
I do wish I could remove the "unknown media" message though. Its just another uneeded button press. I'd love to see a firmware update address this...but, being Sony I seriously doubt that will ever happen
Now, if I could just hack these dang microphones off the top of this thing, the recorder would be perfect!