Many online users are reporting that the Samsung Galaxy Y reports that the SD card is not available. (There are also reports of similar issues on other recent Galaxy phones)
Here is how to fix the issue:
1) Samsung Galaxy Y Manual page 16
"Formatting your memory card on a PC may cause
incompatibilities with your device. Format the memory card
only on the device.
In Idle mode, select > Settings > SD card and phone
storage > Unmount SD card > OK > Format SD card >
Format SD card > Erase everything."
2) Do not enable: a) Kies starts automatically 2) Kies displays SD card in Windows Explorer.
The problem is not the phone. It is wrong formatting of the SD card ("When in doubt read the instructions") and issues with the very quirky Kies program.