This will be a rather short port. I was using Skype 4.2 when I got the following error message while trying to show someone what sound Skype makes when it rings.

This error has also been reported to occur when call events happen but I’ve not personally witnessed it.

Turns out the solution is simple, but quite awkward. The steps are:

1. Go to Tools → Options.
2. Under the General section, choose Sounds.
3. Click the Enable all Sounds button.
4. Click the Save button. This is important! Changes will only take effect after you click Save and exit out of the Options window.

Now if you were like me, and trying to test ringtones, you can go back to Tools → Options → Sounds (steps 1, 2 above) and playback your sound (green play button) and you won’t get the error.

An alternative solution, if you get the error during call events is:

1. Go to Tools → Options.
2. Under the General section, choose Sounds.
3. Click Mute all Sounds button.
4. Click the Save button.
5. Repeat steps 1 and 2 to return to the Sounds window.
6. This time, click Enable all Sounds button.
7. Click the Save button.

Hopefully those steps should solve your problem, and I hope this simple solution is useful to you.

(source: Skype forums)