Can you describe the "error screen" that you're referring to? Are you saying that it is hanging on the ( 0 a ) screen? The ( 0 a ) screen indicates that your chumby is booting into the Special Options mode. If your network is configured incorrectly, chumby should eventually drop to the Special Options screen after a couple minutes. If you don't want to wait, you can slide the core unit out of the housing, remove the wifi dongle and reboot. Another option would be to temporarily turn off your wireless router.
Make sure that your USB flash drive is plugged into the rear USB port before powering on the device. Once the Special Options mode appears, select "install updates", then "install from USB dongle".
There is a small chance that your USB flash drive is not supported. We have noticed some compatibility issues with a few PNY Attache drives not being recognized by the Linux 2.4 USB subsystem. If the drive is not recognized by chumby, when you click "install from USB dongle", chumby will flash a bit of text on the screen a simply reboot. Should this occur, you will likely need to try a different USB flash drive.