I had this problem with my X-25M yesterday. I updated the firmware, rebooted Windows 7 Ultimate, and everything was fine.
Then I started playing around with AHCI mode on my motherboard (I had installed with Enhanced-IDE) in order to get instant-TRIM, and after that didn't work I switched back.
Then the drive started getting SMART errors, so I switched around a few more times, and eventually SMART went away entirely, and the drive started showing up as a non-partitionable 7 MB drive.
Intel gave me an RMA after getting my info (processor, motherboard, bios revision).
I did make a backup beforehand though, because of the earlier intel bios snafu, so it really only cost me time and aggravation (and $11 shipping).