There are currently 2 known causes of this error:
1) Your desktop colour depth is set to 256 colours, or less. This is simply solved by setting the colour depth to at least 16bit. Right-click on an empty area of your desktop and choose 'Properties'.
2) You have a corrupt or missing file, dirapi.dll. This file is installed with Windows and/or Macromedia Shockwave Player. You will need to uninstall, then re-install the Shockwave Player. This is freely downloaded from www.adobe.com. You can also fix this problem in the following manner, note, these are instructions for Windows 98. Use either procedure.
1) Open Windows Explorer.
2) Open Windows folder.
3) Open options folder then Cabs folder.
4) Locate and double-click on Win98_52.cab.
5) Locate and right-click on dirapi.dll, choose Extract.
6) Open C, Open Windows and highlight System.
7) Click OK.
8) Restart.
1) Click on Start - Run, type 'sfc' and click OK.
2) Choose 'Extract one file from installation disk'.
3) Type 'dirapi.dll' and click Start.
4) The next window is called 'Extract File', it contains two text boxes. In the top one type 'C:\Windows\options\cabs\'. In the lower one type, 'C:\Windows\system' and click OK.
5) You should get a message that files extracted OK, click OK and restart.