Daily theme CustomPress custom category error

I am getting following error when using the daily theme and cannot see custom post types created by CustomPress plugin.

WP ver: 3.0.1

Daily theme ver: 3.9.6

Windows 7, Xampp 1.7.1 setup

Catchable fatal error: Object of class WP_Error could not be converted to string in C:xampphtdocswp-contentthemesbp-dailylibraryfunctionscustom-functions.php on line 363

I have re-installed the theme multiple times. Is there any fix?