I have this same problem with my brand new Sparkfun Ethernet Pro board. http://www.sparkfun.com/products/10536
I'm on Mac OS 10.6.8 with Arduino 0022 and I also use the 5V FTDI board they sell. I've loaded the latest VCP drivers from FTDI's site. I've selected the correct port and processor. I'm powering from the USB port. The board lights up as expected. I'm attempting to upload the simple Blink sketch as a test, and get this error. Same thing with any other example sketches.
The kicker is, this setup works fine with my other unit, the Sparkfun Arduino Pro 328 board. http://www.sparkfun.com/products/9219
That bad boy has the same processor and everything. I have no reason to believe this is a problem with the board - the bootloader works as shown in the video w1jp provided. My board also appears to have a test program pre-loaded which runs the Ethernet module. It's lighting up the LEDs and appears to be attempting to connect to Ethernet, so it's not DOA.
It would really be helpful if someone would post their resolution to this problem. I'm not looking for "gee, I don't know, but you should try X-Y-Z" but rather a solution someone has found for the problem. Thanks, everybody.