Okay, count me in as one who has had this problem...
I have yet to see an American reporting this problem, so let me be the first. So, as far as I know, I didn't do anything to get this issue to happen-- I was not messing around with firmware, I had the latest update, etc. All I wanted to do was move my DSi ware games to the 3DS.
Now, there is one thing that might make my experience difference than others, and that is that I have very poor Internet. Other than that, I can't think of anything else that might have made this error occur on my DSi and not on anyone else's... I also had quite a few games, and had to delete some things to get memory for the transfer application.
So anyway, I try to download it, I wasn't really paying attention-- my DSi shop disconnects frequently, I am used to having to retry several times. Sure enough, at some point in the download, it has an error-- I think it was close to done, too. Anyway, when I turn my DSi back on, I get this error-- and no matter what I do, I am stuck at that. I can't do anything, not get to the menu, not anything-- as soon as it starts up, it gets the error. So, I am stuck, and hoping that someone can find a solution. If I take my battery out, will I keep my DSi games? Might that solve this? I am not very experienced in problems like this, and I honestly do not know anything I can do. Should I just give up and call Nintendo?
(By the way, when I was updating, I had nothing in my DSi: no game in the game slot, no SD card in the SD slot. Nothing. Also, mine is the DSi, not XL.)
I don't really post on forums very often at all, but this problem has caused me enough stress that I have made an exception for it. I'll do anything I can to help find a solution... I had a great deal of games on my DSi and I really would not want to lose all of them... This is the only place I have seen this problem even mentioned at all, so I decided to add my voice into the mix, saying that this is, indeed, a problem that does happen. Why, I don't know, but it does happen...