OK, the manual stinks! To set the time/date, IGNORE THE MANUAL!!!
Create a file called time.txt with one line with the date, separated by periods, then space, then 24 hour time such as:
2012.02.10 14:10:00 as the example for Feb 10, 2012 at 2:10PM
Right click on the file and send it to the removable drive. Disconnect the camera, turn it on via the slide switch. Press and hold the record button until LEDs light up, Green will show up first, then blue with white. Press record quickly until blue/white alternates with green. This indicates that the unit is recording. The date should be correct when you check your sample recording and time.txt should be gone from the camera root folder. The correct info was on a Scott Patterson blog. Many thanks to him for posting correct info!