New Mega 2560 - failed to leave programming mode

Just unwrapped my new mega 2560, loaded the latest arduino IDE, selected the Blink sketch, changed the Board to Arudino Mega 2560 and selected the right serial port. When I try downloading the example Blink sketch I get the following errors (and the sketch doesn't run):

avrdude: stk500v2_command(): unknown status 0xc8
avrdude: initialization failed, rc=-1
Double check connections and try again, or use -F to override
this check.

avrdude: stk500v2_command(): unknown status 0x01
avrdude: stk500v2_disable(): failed to leave programming mode

I've tried a different USB cable (even though I know this one worked on my printer). I know the IDE is working because I also purchased a nano and I can download the Blink example without any problems. Any help would be appreciated.
Thanks.

Did you installed the USB drivers for the Mega2560? Check your Device Manager(Im assuming you are on Windows) and see if it was installed properly. Then select the corresponding serial port in Arduino before uploading.