This sounds to me that the PLC is not talking the same language as the software, well we know that ain't so!
Lets go through this one step at a time:-
In the Project, Settings tab, you have selected 'ON-LINE' and the sofware found the PLC alright?
You then select 'Block Status' and you select a block from the list availiable (in the PLC program) or do you just type in a block that is supposed to be in the PLC i.e PB1?
Then when you enter this, you are asked if you would like to exit status and when you select no, the error message appears and you are bombed out of block status.
I have never come across the error message that you have posted, but I have had a few messages come up when trying to view online status. The way that I have managed to get around them is by coming out of 'block status', unplug the interface lead from the PLC, plug it back in and try again. This method usually works for me, so it might be worth a go.
We use the comm 1 port on our PC's for comms and on one or two occasions I have had to delete the comms port in Windows system manager (win 98) and then let windows re-detect the port and re-install the driver.
as Mike states, the version number and OS, and CPU type might mean that we can be of more assistance, rather than just plucking ideas out of the air.
Paul