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Are you sure? normally the desktop online.exe doesn't work and gives that error

hmm, i found one problem like yours and there was no actual solution.
try downloading this
http://www.mediafire.com/download.php?oz2jjt1yzml (it's the file you need but i don't think it will solve anything)

Are you running XP, Vista, or 7?

If Vista or 7, try right clicking online.exe from the folder you installed PSOBB and selecting "Run as administrator".

Ok
#1 no that file didn't do anything.

#2&3 I am running it on windows xp