I have a scenario where the client will be dropping a file into their FTP, which I will need to pick up and load into ET's data extension.
Currently the only available Extract Types in the Data Extract activity are Tracking Extract and Data Extension Extract.
Best Answer
Extracts are for getting data out of the Marketing Cloud. What you would need to set up is an Import Activity, and a Custom File Location.
Creating File Locations
You don't need to set up the transfer that this page is detailing. Just set up the location, and your import activity will grab the file from where you uploaded it.
Note: You cannot use subfolders in the file location. The FTP username must be chrooted to the specific folder you will upload the file to. If you need subfolders, you would need additional FTP users, and File Locations set up in the Marketing Cloud.
Creating Import Activites
Once these items are set up, you can then run your imports adhoc, or set up as part of an automation.