I'm not sure if there is any other way to confirm whether the phone is communicating with the PC or not, but I had a problem with one of the two computers that I use with "USB Debugging", although that one was XP. Initially it worked, then at some point it stopped recognizing it. I believe I went through the Device Manager and showed "hidden" devices then removed every instance of my phone (in theory, this forces Windows to reinstall the driver from scratch the next time it is connected). I may have also ended up installing a driver through a 3rd party to get the phone connecting again, but I can't remember.
But first things first... I had this happen to me the other night on my Vista computer and after getting that error about 4 times in a row, I used the "restart ADB server" option in B4A and suddenly it started working again. Maybe not your problem, but simple enough to try. Of course if a reboot didn't fix the problem then that likely wouldn't fix it either.