I have 2 BTC in my Bitstamp wallet. I have over 10,000 XRP (no issue
If this is in your Bitstamp account then you need to withdraw it to Ripple before you can use it on the Ripple platform (e.g. just as BTC at MtGox can't be used on the BTCE exchange).
I have trusted Bitstamp up to $300 in my Ripple client.
To get bitcoin from Bitstamp you'll need to trust Bitstamp for >= 2 BTC (if you fail to do this before attempting the Bitstamp withdrawal, Bitstamp will redirect you to the Ripple client page to extend the required trust). No trust is required for USD unless you'll also be dealing in USD with Bitstamp.
I've tried to enter an order selling 1 BTC for 8400 XRP.
Error: Insufficient balance to fund created offer.
The balance referred to here is your BTC balance within Ripple, which from the sounds of it is zero.