UPDATE: I'm a newbie, however, it would appear these avrdude errors appear if the 2560 has the Ethernet shield mounted while attempting to upload the sketch to the unit.
If the 2560 has no shields attached, I can upload the test code successfully, after which I unplug, attach the Ethernet shield, plug in again, add Ethernet and voila. Pretty awesome being able to ping an Arduino board...
Is this behaviour normal? Do all Arduino's need to be bare of shields, in order for the sketch to upload?