I have done a test of this with DFP 1.1.3 in Windows 7 with DW CS3. I was able to use both the upload and download server behaviors without issue. Activating the extension was not a problem either.
I'm curious if there is something else that might be wrong here. What is the build of DW CS3 that you are working with? This info can be found under Help > About by clicking on the scrolling text, you will need to have build 3481 at least.
Also do you have any non WebAssist extensions installed? If you have a tool like the ADDT or another upload or download extension it could be interfering. Please post back with these details so that we can determine how to proceed.