This error message is caused when Morae Recorder is unable to open the local network ports it needs to allow Observers to connect. If Observer connections will not be used, this option can be turned off in Modify Recording Details > Capture Options > uncheck Allow Observers.
If Observers must be able to connect, turn off all firewalls that might be blocking Morae Recorder from listening on its two ports (8080/5555). Another item to try is shutting down all possible programs that are currently running. Some applications may use port 8080 other than Morae Recorder so a conflict is possible. In version 2.0 or greater of Morae you can re-map the ports that it uses.