I'm been getting this annoying error after I switched back to my Pocket PC PDA. Before this I was using an Apple iPhone. I survived for 2 whole months and decided to give it up. I might blog about my painful experiences with iPhone next time, but for now, back to the error message.

This error only happens when I'm connecting to my laptop to perform an ActiveSync. Did a search and found the resolution here:

On the PDA, go to Settings -> Connections -> Network Cards

Tap on Remote-NDIS Host.

Instead of using the default "Use server-assigned IP address", choose "Use specific IP address".
Set the following:
IP Address: 169.254.2.1
Subnet mask: 255.255.255.0
Default gateway:

Performed the ActiveSync again. The error is gone.

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