After several test it's still not working with my home hardware.
The Windows 7 is a 32 bits system at work with different hardware.
Same Prolific driver...
After installing Windows 7 64 bit RC at home I encountered the same problem.
It concluded its a combination of the PC hardware I have and the way the prolific driver functions and the single sided serial board.
After fiddling with the avrdude configuration, which did not help either, I decided to write my own uploader that replaces avrdude.
All works fine now in Windows XP with my Arduinoi 2000 and the ssb.
And, yes, you have to select the correct board and port.
If you don't you'll get the same error.