Currently (7.x-1.x-dev on 2011-11-22), devel generate fails with PDO exception for entities containing a filefield which path is not yet created (e.g. you haven't yet manually created an entity with a content for the respective filefield). Devel.modules imagefield generation plugin in contrast handles this correctly.
This bug prevents devel generate from working (sometimes _at all_), when:
* trying to generate test content having filefields on a newly installed site (after "drush si")
* trying to generate test content having newly added filefields with (new) path set
* trying to generate test content having filefields with changed (path) settings
* in other scenarios, see http://drupal.org/node/924228
Devel generate has to create paths for filefields like the imagefield content generation plugin does it: By using "file_prepare_directory" and "FILE_CREATE_DIRECTORY".
Patch will follow soon.