I'm finishing up the new packetcollector.  To address you exact points:
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		| Error: InflatePacket: inflate() returned -3 'unknown compression method' | 
	
 There is a bug in PC where it could process packets out of order therefore breaking sync with the encryption.  I figured out (with help from some of the ShowEQ guys) how to fix it and am in the process of doing so.
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		| I figure the fail to upload might be that you guys are releasing a new version and needed to change acts/pwds | 
	
 Correct, we do this when the db changes so that existing PC's in  the field will not corrupt the data.
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		| but why don't the txt files get populated? | 
	
 One of two reasons, if it was never sync'd up it will not see items/texts.  You should see lines like "New Item: Blahblah (222)" if it "sees" new items.  Texts actually need to be read (right clicking on  the book/scroll from main inv) to be added.. You'll see "New Text: (xxx) blahblah" when it sees one.