Duemilanove not Loading

Today, testing out my new Arduino Duemilanove, with Arduino 0015. after reading the first part of the manual, I made the following sketch:

#define LED1 4

#define LED2 12

#define LED3 13

void setup()
  pinMode(LED1, OUTPUT);
  pinMode(LED2, OUTPUT);
  pinMode(LED3, OUTPUT);

void loop()
  digitalWrite(LED1, HIGH);
  digitalWrite(LED2, HIGH);
  digitalWrite(LED3, HIGH);
  digitalWrite(LED1, LOW);
  digitalWrite(LED2, LOW);
  digitalWrite(LED3, LOW);

then, i saved it, verified it, and compiled it. with success. but when i try to load it onto the board, the IDE froze, with no error message, however LED2 (digital output 12) is blinking constantly with the frequency of about 250-500 miliseconds.

Thoughts? I am running Windows XP SP3, with USB 2.0, and a recently purchased USB A-B cable.