Yes, I got that also, but was actually able to upload a file sucessfully, I think. G shows 20 items uploaded and no errors, but my Base console shows only 6.
The funny part is that I have two files, one is #*$!.txt and the other #*$!YY.txt.
G tells me to upload the #*$! file through the site interface, and I did, and also uploaded by FTP, but it's showing success for the #*$!YY file instead, so it's a little cranky, I guess.
As for froogle being dead, I don't really know. I'm going to upload a bunch more stuff and see if my traffic improves as it should.
One thing I did notice is that Froogle pulls from all kinds of places, Tias, Alibris, etc. and ebay and ioffer as well, but not Yahoo auctions. I think they are limiting all of Yahoo-related items, including store items (Amazon, too, is not represented).
I've always thought that G should buy ebay, but maybe they actually have their eye on Yahoo. The price, for either, is right. I expect an offer on one of them (maybe both?) or maybe they want Amazon, in the next 6-12 months.