This error message is caused by missing or corrupted labels.rep and messages.rep under \\repo\locales\1033.
Stop the Application Server Rename the %SD_SERVERHOME% directory (i.e. Rename to "server.old") Run the Service Desk Application Server setup from the Installation CD. (Re-)install the Application Server by chosing 'repair' (this will re-create the server folder and structure) NOTE: Re-apply the 'server' portion of the current Service Pack running.
Thanks Mark, your advice was helpful but when I tried the references, my client implementation still failed. It looks like my problem is local to my PC as I was able to get the client application to work when installed on another PC.