I am running a similar software setup here...the only difference is that I am running the "stock" 2.2.18 kernel that came with the Progeny iso file when I got it back in April. I initially installed the KDE 2.0 that came with Progeny, and subsequently upgraded to the latest & greatest via kde.tdyc.com using apt-get dist-upgrade (FOR POTATO). I do NOT get the DCOP error here. I would suspect something is wrong with your install...I know of a couple of others that have done the same as I, and don't have this error. Sorry I can't pin-point your error, but I thought you should know that it is NOT the Progeny - KDE 2.1.2 for Potato combination that is giving you your problem.
Cheers & Good Luck! -Don Spoon-