Alex,
Please read this all the way through before trying anything. You may see that you don't need to do some of the suggested steps.
When you perform a hard reset, which I guess is what you mean when you say you reformatted, you sometimes have to "Delete Partnership" on ActiveSync and establish a new partnership.
Check to see what the device name is on your Axim since the hard reset. Click Start>Settings>System>About>Device ID and see what is listed next to "Device Name". For example, if your ActiveSync partnership shows the device name as Pocket_PC and the device was renamed to Pocket_PC1 when you performed the hard reset, then ActiveSync won't recognize your device.
If all is OK there, or if you know the problem is the USB connection, then right click on "My Computer" on your PC (after removing the Axim from its cradle), click on the Hardware tab, then click on Device Manager. Scroll to the USB Connections and expand that selection. If the "Dell Axim USB Sync" is listed but not working, right click it and remove it. Then reboot your PC and try again.
If you know it's a driver problem, reinstall the ActiveSync software from the companion CD that came with your Axim. I know it's an earlier version of AS, but it contains the driver specific for the Axim. You can then reinstall the latest version of AS, 3.7.1, after you get the USB sync working again.
If you don't have access to the CD, go to Dell's support site and download this driver from
this page. Read all of their instructions before installing the driver.
Good luck, and post back so we know how you made out!