There is an issue present in 4.2 the prevents users from importing records. This is due to some legacy code that was not removed.
Note: this error will only arise if your php.ini error reporting settings include E_NOTICE. Users who are excluding notices should not encounter this issue, e.g.:
error_reporting = E_ALL & ~E_NOTICE
This is due to the undeclared variable left over in the code.
To patch your instance, copy the attached processModels.php file into your X2Engine web root at protected/views/admin/processModels.php
This patch will also be available in the follow-up point release next week.