Here is a potential temporary fix for the dreaded “Clicking Brick Syndrome”. Note that this is not coming from any official source, but what I and some others have managed to put together to fix a problem that we can’t actually reproduce… in other words, blame me, not LEGO, and if it looks like a shotgun approach, it is (but it’s the best I’ve got).
1) Completely disconnect your NXT from the computer (no USB connection).
2) Remove all external BlueTooth dongles from your computer, and turn BlueTooth off on the computer (just to be sure).
3) Reboot the computer (this is to make sure no other application is trying to compete for the USB port).
4) Restart the Mindstorms application (and, if possible, don’t start any other applications).
5) Remove one battery from the NXT for a couple of seconds, then reinsert it.
5) Push the NXT reset button firmly for five seconds (make sure you actually press it, and press it for the whole five seconds).
6) Now (with the NXT clicking and the environment up and running), connect the NXT to the computer via the USB cable. Preferably use a “primary” USB port, one on the computer itself and not on a keyboard or monitor.
7) On a PC, you can go to the device manager and check to see if the NXT shows up in “Firmware Update Mode” (if not, you may need to uninstall and reinstall the software and drivers)
8) Update the firmware to 1.03 using the “update firmware” under the tools menu.
9) If this does not work, try *briefly* (one second) pushing the reset button again.
If the above sequence does not work, try repeating steps 1-9 but using a different USB port on the computer.
If even *that* doesn’t work, try installing the software on a different computer and repeating the entire process.
Please use the comments section of this post to announce your results: what you did, what seemed to fix it, or what else you tried and it still refuses to do anything but click. Feel free to include any and all system information you can dig out as well: what we can piece together I’ll try to get to the right hands within LEGO. For those interested in the details, one potential conflict that could be causing this is the Mindstorms environment not finding the NXT at the USB port it thinks it is connected at: thus all the fuss about having other applications closed, and physically switching USB ports.
PS - thanks to commentor Rick Rhodes for bringing this up as well, in the form of a forwarded list from "John".