I'm having the same problem with 7.4 and 7.4.1beta. My hosting provider is Dreamhost, and I'm on their "Happy Hosting" plan, i.e. shared hosting.
It appears that some files are uploaded before this failure happens. Once it happens, I cannot close the publishing window and have to force quit Rapidweaver.
Also, I can browse using the browse button in publishing settings. I spent some time w/ Dreamhost support, and they found nothing wrong. I was subsequently able to upload all files using a dedicated ftp client, (Yummy FTP.)