This error may be caused by a few different situations.
First, you will want to make sure that there are no software firewalls running on the computer that could block access over the ports that Recorder initializes when recording (port 8080 and port 5555). If an application is using port 8080 for any reason (sometimes used as a Web interface), try closing this application.
To see what applications are using what network ports, try the following command
Start > Run > cmd
If Morae Recorder is still generating this error message, please make sure that no other applications that use Web cameras are running. If one application initializes the Web camera, no other application will be able to do so.
If that still does not resolve the issue and you are still receiving the error message, please try re-installing the drivers for the Web camera.