Okay from looking at your screenshot two possibilities...
1. Uncheck the repartion box... That shouldn't be necessary unless you were running a custom ROM that was using the MTD format.
2. Your tar file in the PDA slot.. I noticed the extension on it was SPH-D700-FC09-8Gb-REL.tar.md5.zip, using a file explorer like Windows Explorer name the file so you loose the ".zip" extension and give that a go..... Make sure you have it set to show extensions in your file explorer so you can change/rename it.
I think the ".zip" is what is causing it to fail.
Report back and good luck.