It's probably saying it's an m3u because you have something like WMP as your default player...Where are you trying to upload the song from, LW ??
Go to your shared folder outside of limewire (click on a file in your LW library and click explore) this will open your shared folder, try uploading it from there...
explanation of a m3u...
http://www.gnutellaforums.com/showth...&highlight=m3u