This means your NXT is spoiled and needs reseting. This is usally caused by unplugging before the program downloaded.
1) Completely disconnect your NXT from the computer (no USB connection).
2) Remove all external BlueTooth dongles from your computer, and turn BlueTooth off on the computer (just to be sure).
3) Reboot the computer (this is to make sure no other application is trying to compete for the USB port).
4) Restart the Mindstorms application (and, if possible, don’t start any other applications).
5) Remove one battery from the NXT for a couple of seconds, then reinsert it.
5) Push the NXT reset button firmly for five seconds (make sure you actually press it, and press it for the whole five seconds).
6) Now (with the NXT clicking and the environment up and running), connect the NXT to the computer via the USB cable. Preferably use a “primary” USB port, one on the computer itself and not on a keyboard or monitor.
7) On a PC, you can go to the device manager and check to see if the NXT shows up in “Firmware Update Mode” (if not, you may need to uninstall and reinstall the software and drivers)
8) Update the firmware to 1.03 using the “update firmware” under the tools menu.
9) If this does not work, try briefly (one second) pushing the reset button again.
If the above sequence does not work, try repeating steps 1-9 but using a different USB port on the computer.