Hi Mark,
It is the normal state to have the music you are ripping go onto the B2's HDD.
However because the first models of the B2 did not have HDDs, the software has the ability to use a portion of the little SD Card inside the B2 to store music - (the rest of the SD card is used to hold the operating system and the B2 "boots" up from this card!).
There is a B2 command to switch the system into using either the HDD or the SD Card as it music store. Sometime if the B2 experiences a (power) glitch this switch can happen spontaneously - I think this is what happened in your case.
While in HDD mode you can not play (or indeed see) any music that is on the SD card. (if you switched back to using the SD card you could, but then the HDD music would not be visible).
The B2 has a function to copy music held on the SD card off onto a USB device plugged into the back of the B2.
Once copied off you can the "import" onto the B2's HDD.
To delete the SD Music I would suggest "switching" to using the SD Card then use the Web UI to delete the content. Then remember to "switch" back to the HDD mode.
Fred