The bug has been opened on https://bugs.beta.launchpad.net/ubuntu/+source/totem/+bug/108366

"Binary package hint: totem

    When adding to the playlist using the sidebar interface, totem defaults to the directory of the last selected file when prompting for a new file. When that directory is unreadable (e.g. http://www.gearwire.com/media/ (after adding http://www.gearwire.com/media/seymour-duncan-guitar-pickups-1-musikmesse.wmv by pasting into the location control in the last add)), totem presents the message "error accessing 'http://www.gearwire.com/media': Access denied". If this dialog is closed, totem is unable to add new files to the playlist (even when pasting the Location) until a readable base location (e.g. the home directory) is selected.

    In functional terms:

Observed Behaviour:
1) Totem is open, sidebar is open in Playlist mode
2) Click "+" to add a file
3) Paste a location in the Location control (public location given above)
4) Click "Add" to add the location
5) Add interface closes, Totem shows the new file in the playlist
6) Click "+" to add another file
7) Totem presents dialog with "error accessing 'http://www.gearwire.com/media': Access denied"
8) Close dialog
9) Paste another location in the Location control
10) Click "Add" to add the location
11) Nothing happens (no UI changes (except button blink), no message, etc.

Expected Behaviour:
1) Totem is open, sidebar is open in Playlist mode
2) Click "+" to add a file
3) Paste a location in the Location control (public location given above)
4) Click "Add" to add the location
5) Add interface closes, Totem shows the new file in the playlist
6) Click "+" to add another file
7) Totem presents dialog with "error accessing 'http://www.gearwire.com/media': Access denied"
8) Close dialog
9) Paste another location in the Location control
10) Click "Add" to add the location
11) Totem shows the new file in the playlist

Alternate acceptable behaviour:
1) Totem is open, sidebar is open in Playlist mode
2) Click "+" to add a file
3) Paste a location in the Location control (public location given above)
4) Click "Add" to add the location
5) Add interface closes, Totem shows the new file in the playlist
6) Click "+" to add another file
7) Totem presents dialog with "error accessing 'http://www.gearwire.com/media': Access denied"
8) Close dialog
9) Totem defauls to user home directory (or /media, or any known safe location)
10) Paste another location in the Location control
11) Click "Add" to add the location
12) Totem shows the new file in the playlist
...
After some review, this appears to be related to functionality in the GTK File Chooser, designed to prevent saving files to unreadable locations, specifilcally that gtk_file_chooser_set_filename() calls gtk_file_chooser_select_filename, and passes the return value to the caller (FALSE in the case of inaccessible URIs). This then blocks further interaction with the GTK File Chooser until some other URI is selected. Achieving the listed Expected behaviour may have far-reaching consequences.

The Alternate Behaviour looks easier to accomplish with an adjustment to totem-uri.c, by adding return code checking to gtk_file_chooser_set_current_folder_uri shortly after around line 321."