When I use Application Loader, I get to the point where it asks me to \"Choose...\" the file to be uploaded.
If I understand correctly, it supposes to be the appName.app
If I remember correctly, the file that you need to choose is a "*.ipa" file which I was able to generated by archiving to project.
If you have xcode 4 it is recommended to add another scheme e.g. dist scheme and configure the scheme to release. Than compile (using the dist scheme) and go to the organizer to view/share/ or submit the application.
If you are using xcode 4, it has a bug which crashes the xcode if you choose validate or submit, in this case you should save upload the *.ipa using the application loader.
Hope this helps.