Same happend to me right now when adding a Brother HL-5340D. 
I downloaded the ppd file from 
http://welcome.solutions.brother.com/bsc/public_s/id/linux/en/download_prn.html#HL-5340D
 and provided it to system-config-printer. When I click on "Apply" I get the 
same "CUPS Server Error" dialog, with the text "server-error-internal-error".

$ cat /etc/issue
Ubuntu 12.04.1 LTS \n \l

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You received this bug notification because you are a member of Desktop
Packages, which is subscribed to system-config-printer in Ubuntu.
https://bugs.launchpad.net/bugs/254202

Title:
  server-error-internal-error while adding printer

Status in “system-config-printer” package in Ubuntu:
  Confirmed

Bug description:
  When adding a networked lexmark E120N printer, after specifying the
  PPD file, I see a "CUPS Server Error" dialog, with the text "server-
  error-internal-error". This stops me from adding the printer.

  This is in Ubuntu Hardy.

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