Okay.. here are my findings for the evening.
1. Like I said, a normal playstation controller works fine.
2. The mat does get some kind of power because lights go on when I step on arrows.
3. Was getting fustrated, so i went digging around for my old playstation. Found it, but dont have my DDR games any more..

(Grrrr!)
4. Figured I could at least fire it up and see if I get any kind of joystick control out of either the pad, or the box with the select/start.
5. In the meantime.. found my old PS to USB converter.
6. Hooked up the PS to USB converter, and it loaded up some Playstation drivers in the XP Controller Config screen.
7. Stepped on arrows.. lights were much brighter... could step on one arrow, then the opposite, and they all lit up.
8. Went to test the mat in windows again, and nothing recognizes, even though the mat gets power.
9. Noticed the end of the cord that coes into the playstation connector (from my mat's box that has the select/start on it)
is coming out a bit. possible disconnected wire in the connector? How do I test that out?
Thats where I am now.
And I'm tired.. time for bed.
Morning update:

Found this website
http://www.mymybox.com/ddracc.htmlThey got my part on sale for $14.00 but who knows if its in stock. I"ll have to call them today.
UPDATE: 9/16 - looks like this website is out of business or something. tried all phone nubmers. some are disconnected, another was just an answering machine.
I'm wondering if I could get the pads to recognize thru my ipac connector... just turning them into keyboard strokes. Sounds like a good idea, eh? Wonder if it is possible.