Hi,

Data Loader:Data Loader is a client application for the bulk import or export of data. Use it to insert, update, delete, or export Salesforce records. When importing data, Data Loader reads, extracts, and loads data from comma separated values (CSV) files or from a database connection. When exporting data, it outputs CSV files.

The Data Loader is an easy to use graphical tool that helps you to get your data into Salesforce objects. The Data Loader can also be used to extract data from database objects into any of the destinations mentioned above. You can even use the Data Loader to perform bulk deletions by exporting the ID fields for the data you wish to delete and using that source to specify deletions through the Data Loader

Features of Data Loader:

• An easy-to-use wizard interface
• An alternate command line interface
• A batch mode interface with database connectivity
• Support for large files with up to millions of rows
• Drag-and-drop field mapping
• Support for all objects, including custom objects
• Detailed success and error log files in CSV format
• A built-in CSV file viewer
• Supported on Windows 7 and Windows XP, though an unofficial OS X version is also available

Errors in Data Loader:Here's a list of common Data Loader errors you'll receive as you use Data Loader to update or insert records.

Error: Row is larger than header
Cause: There is data in a field that does not have a header to map.
 
Error: Insufficient access rights to object ID / insufficient access rights on cross-reference id
Cause: User performing the action does not have access to the records or object being referenced. For example:
A record you are referencing is deleted
A record are referencing never existed (for example, due to a typo in the id)
A record you are referencing exists but is not shared with the record owner of the record you are inserting or updating
A record you are referencing exists but is not shared with the user running the insert or update
You don't have access to the record type that is being assigned to the record.
 
Error: Duplicate value found
Cause: User is attempting to update a unique field.
 
Error: ID value of incorrect record type
Cause: Record type needs to be entered with ID, not name.
 
Error: Owner ID: ID value of incorrect type:
Cause: Record owner needs to be entered with ID, not name.
 
Error: System.Exception: Too many SOQL queries
Cause 1: Trigger on the object is exceeding the Apex governor limits.
Cause 2: Batch size is set to higher number. Try reducing the batch size to 1 so that records are processed one by one.
 
Error: Not processed due to batch error: Invalid Batch : Failed to parse CSV header
Cause: This error will only occur if the "Use Bulk API" is enabled.
Make sure that at least one field is mapped or the field mapping step is not skipped.
For more information, see Defining Field Mappings.
 
Error: Name column must be mapped when solely inserting records
Cause: This happens when the Name standard field (for the object in question) is not included in the csv. file.
You need to include the Name column and specify a name for each record.
 
Error: Invalid CSV file format. Please select a different file. Error reading row #: the number of data columns exceeds the number of columns in the header.
Cause: Data Loader 34.0 introduced the ability to use comma or tab delimited CSV files. If a comma delimited file contains tab characters within at least one cell, Data Loader reads that tab as an additional column.
To resolve this issue, use a text editor to edit the file and wrap the cell in question in quotation marks.
Example: "123 Main St."
 
Error: Invalid Number ("<Field Name>: invalid number: <Number Value>")
Cause: This error is returned when the cell (import file) targeting a number field contains commas as thousands separators.
To resolve this, make sure that number field values are typed with no commas in the import file.
 
Error: Group membership operation already in progress
This error occurs when you are updating user's role information and if you have sharing rule set up, record will not get updated as all sharing rules will be recalculated everytime a single record is getting updated.
Solution:

From Setup, enter Defer Sharing Calculations in the Quick Find box, then select Defer Sharing Calculations.
In the Sharing Rule Calculations related list, click Suspend.
Make changes to sharing rules, roles, territories, or public groups participating in sharing rules.
To enable sharing rule calculation, click Resume once you done with your changes.

Note: The above errors are the common ones. The error you encounter might not be in the list.

External ID:This is a field that usually references an ID from another (external) system. For instance, if the customer has an Oracle Financials system that they will be linking with Salesforce, it may be easier for them to be able to refer to the Oracle ID of account records from within Salesforce. So they would create an external ID in Salesforce and they would load the Oracle ID into that field for each account. They can then refer to that ID field, rather than the Salesforce id. 

Additionally, if you have an external ID field, the field becomes searchable in the sidebar search. You also can use the upsert API call with the external ID to refer to records. 

You can have multiple records with the same external ID (though it is not recommended, as it will defeat the purpose of the external id) 

How many External ID's can each object / entity have:
In the Salesforce CRM user interface, you can identify up to seven (7) custom fields on an object as being an external ID field. The field type must be a text, number or email field. An external ID contains record IDs from a system outside of Salesforce. You can match against this field during importing or integration or when using the upsert call. Also, external ID fields are indexed, so selective filters on them should run quickly.

Uses of external ID:Please refer to the below links
http://help.salesforce.com/HTViewSolution?id=000002783
https://success.salesforce.com/answers?id=90630000000gtxTAAQ

Please mark it as the best answer if it helps you.

Best Regards,
Nagendra.P