This error means that the game has an XACT audio project, but the version of the XACT project isn't supported by the version of the XNA Framework that the game is targeting. XNA Framework 3.1 games can only use XACT3 projects, and XNA Framework 3.0 and earlier games can only use XACT2 projects. I posted some information in
this blog post about this error message and steps to resolve it. There are also links to the relevant XNA Game Studio documentation topics in that blog post.
Thanks!