I have had this error on more than one computer with different versions of windows, I am currently using Win 7. I just finished paying for a session with carvewright tech support, and he was able to find a solution for me. The steps he took are:

1. Change compatability to win98service pack 3 (This did not solve the error)
2. Remove all carvewright favorites files from the computer
except the one in the carvewright directory
( I mean all "favorites" files even in other directories on your computer and the ones with numbers after them like, favorites 14823, no matter what directory they are in. you can delete them or move them to a dvd or thumb drive for backup.. GUI.EXE is trying to open more than one favorites file. This seemed to solve the error as designer opened)
3. Open the carvewright designer and open "edit,.... preferances,....general"
and change the cache to 256MB. (The 16 mb default assigned by designer is ok in win98 but is sometimes not enough in vista or win 7, I think this made designer run faster also!)

I hope sharing this helps solve this issue. I know I am not the onlyone that has had the problem.