The freeduino link worked now, and I can see the serial schematics and a pic of the kit. It is simlar to Arduino (in fact, almost the same). R2 value (330 ohms) seems to low, that makes power led too bright and with high current comsumption, but this doesn't affect to upload sketches.
I can see the auto reset feature too. I had problems here with auto reset in Preliminary Arduino S3v3 version, WinXP sp2, and standard PC serial cable (with pins 2, 3,4 and 5 connected), but the problem was the computer COM port speed. It was configured to 9600bps (default), causing a similar error while uploading sketches. Sometimes it works, sometimes don't. Then I changed the COM port speed to 19200bps, and it worked fine, always. I saw you said you used serial and USB, and you had problems with both, but can you check the COM port speed, just to be sure?
I'm sure the capacitor will work always, no matter if positive to GND or negative to GND. [u]This is not causing your problem.[/u] The cap position/polarity will only damage it, but this can take a long time using it. Much longer if you use positive to GND.
There are many examples showing cap negative to GND (not correct), and I found one with positive to GND http://www.sparkfun.com/datasheets/Prototyping/RS232-Shifter-v2.pdf. The original page http://www.uchobby.com/index.php/2007/06/11/ttl-to-rs232-adaptor-explained/ explains it.
This applies to dettachable serial to TTL converters.
But Arduino (and your Freeduino) has this converter connected even when not used to Serial to TTL communications. When you don't use it, this circuit can be affected by pin1 as output (if used), causing inverted voltage on cap. Because of this I suggested to use non polarized cap. But if you need to use a polarized, again, use it with positive to GND.