This answer is late, but hopefully it helps others.
I have had the same experience of not being able to connect. Rebooting phone and PC does not help. I found the fix at: http://developer.android.com/tools/help/adb.html at the bottom of the page.
Basically you follow these steps:
- Connect phone with usb cable to PC.
- Issue command:
adb usb - Issue command:
adb tcpip 5555 - Issue command:
adb connect xxx.xxx.xxx.xxx
Where xxx.xxx.xxx.xxx is your phone’s IP address.