Originally Posted by DaleDe
You will get this error if the PRC file is not in Mobipocket format, has DRM, or is in high compress mode.
Both prc files I tried were downloaded from Mobipocket website. One was a sample of a book and the other was a free book which had a mobi file extension (I changed this to prc).
When I used BD to convert a text file to prc format and then opened this prc file. everything worked OK. It looks as though the Mobipocket file had DRM or something, although Calibre had no problem with them.