Snowman
Using 1.06 I have been able to transfer a 1 GB ISO image in a little over a minute and a folder containing 16,000 files, totalling over 3GB, without a hitch - this last folder is a backup which I actually had the need to restore during last week, after the firmware upgrade.
In my case the hardware is an IBM xSeries 206 server with it's onboard 1GB ethernet adapter, a Netgear GS108T switch and the DNS-323. Jumboframe is enabled and configured for a 9000 byte frame - cables are off the shelf CAT5 no more than eight feet long.
This hardware has been used for two years with only one change - the GS108T switch was added after the upgrade to 1.05 when jumbo frame was added to the firmware - and as I mentioned has been used with every firmware released since 1.02 with no errors.
I have seen errors like you describe - but only when using wireless and then only with a particular intel wireless card that had a high receive error rate, and I could reproduce the error both with and without the DNS-323 being used in the transfer.
Can you provide details on the cables you are using - what category, length and were they purchased or crimped by you?
Also - have you tried the transfer with the DNS-323 directly connected to the PC? If it works this way the problem would definitely be related to the network infrastructure.