If you get this if you are using xubuntu or ubuntu then go to the section where you change your default application and change the terminal to konsole or some other gui terminal such as xterm. I think this is caused by the xfce terminal not being able to cope with 24-bit colour or something.
Update (11/08/08): I no longer use Xubuntu etc but still use xfce also think that if you upgrade your ubuntu installation the problem will be fixed.
Hope this helps people searching for this error on Google. If it does, doesn’t, or you know a better solution let me know via email, graham @ domain-name or my contact page