I get the exact same error when I try to open an MPEG file on a local hard drive. Clicking past the error dialog does allow the file to play, but this is a nuisance. It happens with either of these patch files installed:
CyberLink.2021aU_DVD080909-01.exe
CyberLink.2021U_DVD080729-02(Ultra).exe
However, if I reinstall the patch previous to the buggy ones, the problem is gone:
CyberLink.1830U_DVD080411-04.exe
PC is Windows XP Pro SP2 on Intel D975XBX2 4GB RAM, Q6700 Quad CPU, nVidia GTX 260.