Check you are sending a TIFF or JPG file to Nik. (Maybe you are trying to send a PSD?)
Most likely wobertc is correct with the file type setting; you need to pick JPG or TIF.
Also check to make sure you have the most recent version of the plug-in.
From the LR plug-in manager, pick "check for updates" or launch the Nik plug-in(s) EXE a check the settings.
Thanks for the help, i'll give that a try!
Yes the problem is with psd files.