Holy crap! I found the answer!
The answer came from esupport.sony.com and here it is verbatim:
Error: The maximum number of pictures have been reached when attemping to capture a picture using the Network Smart Capture 1.2 software.
To resolve the error The maximum number of pictures have been reached when attempting to capture a picture using the Network Smart Capture 1.2 software ensure the Address, Data, FPO, Movies, and Pictures folders are located in the C:\Documents and Settings\%username%\Application Data\Sony Corporation\Network Smart Capture Folder.
NOTES:
* Replace %username% with the username of the user account having the issue.
* If a folder is missing, create the folder.
I’m kinda surprised that no one answered my question, but I’m assuming that’s probably because this error shouldn’t be a problem… random missing folders is kind of odd. Well, if you’ve had this problem, now you know how to fix it! \(^_^)/