This error occurs when the Design Manager directory has been moved or certain installed components have been removed that Design Manager requires to function properly. To fix:
1) Re-install Client setup. Restart the computer before proceeding. Run the 'setup.exe' in the DMPro50\wssetup directory. Make sure that you point the setup to the correct network drive. It will automatically default to the F:/dmpro50 directory. This absolutely needs to be set to the path that contains the dmbin32.exe file or the main Design Manager directory on the network share. It cannot be a long file name (cannot have spaces and must be 8 characters or less) and must include a mapped drive letter.
2) Restart the computer before proceeding. If Client setup does not fix the error. Have the client Right click on the Design Manager shortcut and select Properties. Find out the target directory. Now click the Windows Start button and select Run. Type the target path in to the Run window followed by dmrs32 /regserver <click Ok>
Example command line may look like this: T:\dmpro50\dmrs32 /regserver
Then replace dmrs32 /regserver with the following: fpautl32 /regserver <click ok>.
Example command line may look like this: T:\dmpro50\fpautl32 /regserver