ok I got it figured out.
Contribute needs to match up whatever you select as the site you are connnecting with and the folder of your website.
It must detect some things and not tell, because if they don't match, it won't let you go any further.
I am trying to connect to a Drupal site. So when I selected the folder of a sub-directory deep into drupal.. it didn't like that.
Choosing the root of the drupal install ( where the index.php ) resides, it worked.
This issue is closed. It works fine using SFTP over a SSH connection.
Thanks for responding graffitti.