Hello,
From the error message, I can tell you are running an older build of our server. The first thing I recommend is updating to the latest build. You can do this on our site at www.pragmasys.com/TelnetServer/Update. You will need to uninstall and reinstall the new server. You should also reboot the server.
The error you are seeing is caused by a large number of sessions, either active or orphan. You should use one of the orphan clean up features to prevent orphan sessions.
There are two ways to clean up orphan sessions.
The first is the Server to Client Heartbeat under the Users -> Handheld page. This will send a signal to the client after the configured period of time, then disconnect the session, if the server does not receive a response from the client.
The other is the Idle Session Timeout under the User General Settings page. This will shut the session down after a fixed period of inactivity.
You can also increase the desktop count on the InetD page of the Pragma TelnetServer Configuration program. Increase this value by increments of two until you no longer have issues with the system. Keep the number below 16 so as not to interfere with other system processes.