From the Sonic Support database:
“Usually, this error happens when the audio_ts and video_ts folders from a pre-made DVD (either Hollywood or a consumer made) are dropped onto the hard drive and the user tries to replicate them into another DVD or “back up”. Also, the error can be caused due to renaming the file, using non-alphanumeric characters (8 or less), or incorrect path settings as when the files has been moved while the session is in use.
You may also want to be sure that you are building your session to the top level of your hard drive as well.”
Perhaps one of the latter cases applies?