Saving the new screenshot gives the same blank stare: https://img.skitch.com/20110103-b3rgd1m9fpc16bittn16g14sk3.jpg
This is working for me now, but we need to offer some feedback to the user that stuff is happening. Andym added a message about processing in progress to the icon uploading with a simple JS poll - we should do the same here.
I'm assuming andy can add this in pretty quickly. Let me know if that's a lie.
I filed bug 624435 to add a spinner.