Google's Matt Cutts posted a video the other day explaining the top six or so mistakes that SEOs and webmasters make when using the disavow tool.
By far, the most common mistake is uploading anything but text (TXT) files. Many upload Word documents or Excel files, they should not - you should only upload TXT files.
Here is the video followed by the six most common disavow tool mistakes:
(1) File you upload should be a regular text file only. No syntax, etc. People often upload word docs, excel spreadsheets, etc. Just upload a text file.
(2) Typically, the first attempt by users are to be very specific and fine tuned with their individual urls. Instead use a domain: command and disavow the whole site. That is often better. See our machete story.
(3) Wrong syntax is another common issue, use the right syntax.
(4) Do not write the story on why you are disavowing in the disavow text file. Do that instead in the reconsideration request, not in the text file.
(5) With that, when you do that, they use comment out tags. So don't add lots or any comments, it will increase the chance of errors on Google's parser.
(6) The disavow is not the be all and end all. It will not cure all your URLs. Clean up your links outside of the disavow tool as well, don't just go this route.
Kaspar Szymanski, a member of the Google web spam team said on Google+:
As I'm involved in the reconsideration request process, let me tell you this a very important video to watch for any webmaster who has experienced spammy backlinks issues.
Forum discussion at Google+.
