Give it a few minutes for it to read the USB. If the stick is loaded with other stuff it can take a while. When I first put in, it did the same. But wait for the read light to stop and then do the update. Hope this helps. Unless the download file is currupt.
2007 E92 6MT - Silverstone II with /// Performance Exhaust with ACM Test Pipes and BPM Sport Stage II Dev-Tune
2011 F25 X3 3.0d