When trying to upload something for the downloadable products same error found.
Here is what I did to fix it:
The problem seems to be caused by the prototype v1.7.
It works great with prototype 1.6
Get the 1.6 version from here http://prototypejs.org/assets/2009/8/31/prototype.js
or get it from older magento version.
Create this file: js/prototype/prototype1.6.js and put the contents from the link above in it.
Now edit app/design/adminhtml/default/default/layout/main.xml and change this line
I don’t think it’s a problem if you edit this core file.
I hope this helps someone :).