Since I don't know of any firmware upgrades for the 346XTC (at least I didn't see anything on the TWiki site), I'm betting you mean upload, not upgrade.
There's a few causes of this. You have exceeded a memory limit for a group, site or system. A summary of these can be found in the Easier to Read manual for the 346XT (which is basically the same as the 346XTC, the 'C' was for some California based nonsense...)
Easier to Read BC346XT Scanner Manual
The other one is something I've seen a lot - you've done numerous ADDs without wiping the scanner first, and systems have replicated themselves each time you attempted to upload. It's a real good idea to wipe the scanner before doing an ADD, or use a REPLACE function instead.
Another one is that you simply have too many systems to handle. Like most of the other DMA scanners, there are a number of quick keys with very old data in them that take up memory. Combined with doing a lot of ADDs without doing a wipe, this can easily cause the above error.
I would back up your current data (if you haven't done so already), examine what you have and what you are trying to upload, then wipe the scanner and load it fresh.
Mike