|I think you do have a partition but it is not formatted. There are a few programs available to remove the partition. |
When in Disk Management did you try highlighting the drive letter and clicking on Action> format?
The best way to handle flash drives is to use software designed for them. Try going to the manufacturer's website and seeing if any tools are available to deal with the problem.
Honestly, I wouldn't bother with RMAing a 2GB flash drive. You can buy one for under $10 new.
If you wish to play with it more try applying something like delpart of killdisk to the drive. You must be very careful when using either of those utilities that you don't apply to the wrong drive/partition. Killdisk especially.