So here's my long story and, hopefully, a solution to the error.
I work exclusively in FTM, never on Ancestry and have successfully been synching since the last update. Over Christmas the hard drive on my computer failed. Luckily I had a recent full backup of my FTM file, including all media. I also had the CD to reload FTM 2012 on my new computer. However, I lost the sync files with my failed hard drive. I could no longer synch.
I thought that a logical process would be to go into Ancestry, delete the tree that was there and then try a brand new sync from within FTM. No luck. It would go almost all the way through the process then give the error at the "Preparing data to be downloaded from Ancestry."
As expected and as is the norm, Ancestry on-line help was no help. They might as well save themselves some money and not have the unit.
Anyway I thought I was never going to be able to sync and had given up. Then I noticed on a related post that if you simply rename your file in FTM it would solve the syncing problem. Perhaps this is related to a link between the file on Ancestry and my own FTM file? I noticed that although I deleted my tree on Ancestry I still, after a month, get hints from that tree. It never seems to be actually deleted. Perhaps there is still a link between it and my file and therefore it wouldn't synch to an existing tree? Who knows? Ancestry help certainly doesn't.
In summary I renamed my file in FTM and have successfully synched for two days. I'm keeping my fingers crossed.