Dell Digital Jukebox 15GB Gen.1 charging

First off, let me get something out of the way because I spent quite a while trying to figure this out.  There are 2 common suggestions to get the unit working on Windows versions newer then XP (Vista-7-8).  First is to try upgrading the firmware to "PlaysForSure", but this does not work on the 1st generation version of the DJ.  The second suggestion of using Rhapsody to manage the unit, does not work either.  Dell did not release drivers for Windows Vista-7-8 and the unit will not work without those drivers period.

OK now on to my issue.....

I found a first generation Dell Digital Jukebox 15GB at a yard sale, and its seems to operate normally for the most part.  After using a friends Windows XP computer to manage music on it,  the only issue I have noticed is with the charging.  Supposedly this unit charges via the USB cable as long as the battery has atleast 25% power left, or via the AC power cable.  However what I have found is that the only way the unit shows the blinking charging icon is when both the USB cable and the AC power cable are connected at the same time.  Having only one of those plugged in and the unit does not appear to charge, or atleast the power icon doesnt blink indicating its charging.  I have been able to get it up to full charge, but it seems to lose power rather quickly.  The age of the battery might have something to do with this, is my guess.

The AC power cable is not the original but it fits and is the right voltage, but the USB cable is probably the original because it was with the unit when I bought it.  I just had to find a AC power cable around the house.

Is this normal operation or a sign of a dying battery/unit or what?