I ran into this same error a few times, and unfortunately, it can be quite annoying when it strikes.
Some things to check: Did you import MP3 files to use in your menu or elsewhere? If so, convert those MP3s to WAV files. Replace your mp3 assets with the WAVs or just delete the MP3s manually and import the WAV files manually. Make sure there are no MP3 files anywhere in your project folder. For whatever silly reason, certain kinds of MP3 files just don't like Encore and make it act out.
Next, look at your data rates. If you have a very high video bitrate of 8.0 or higher, it could be causing problems. Try a lower maximum bitrate between 6.0 and 7.5.
Another possible solution is to encode your audio as Dolby Digital AC3 instead of PCM.
Why any of these things would work is something I don't understand at all. It looks like there are several bugs in Adobe Encore that cause it to error out like this, and the bad part is that I've heard all these glitches are still in CS4. Sigh...
The good part is that since I've started using the methods I listed up above, I haven't run into a single error lately. Hopefully this helps...
