Answer: This error happens only when you are using a non-dedicated GPU. A non-dedicated GPU refers to a graphics card that is used both for display and GPU computation. Because you connect your display to the card and the nvidia graphics driver imposes a time-limit to the response time of a kernel (a function running on a GPU). This time-limit is referred as the "driver watch-dog time limit". For Linux, this limit is usually about 10 seconds; for Windows, this limit is about 5 seconds. When a kernel is running on a GPU for longer than this limit, the driver will kill this kernel for safety purposes.
If you have only one graphics card to use and you have to use it in a non-dedicated way (i.e. connect to your monitor and for MCX simulations), MCX allows you to slice the entire simulations into chunks, with the run-time for each chunk smaller than the watch-dog time limit. This is done by setting "-r" (repetition) parameters and setting "-m" for each run with a smaller number of moves (total moves/repetition count).
If you have a high-end dual-GPU graphics card, such as GTX295 series, you can simply run MCX without worrying about this limit. Because MCX will use the second GPU to perform the simulation and it is usually not connected to a monitor. Alternatively, if you can install a second graphics card (PCI type) to your machine and connect your display to the second card, this will make your CUDA-enabled nVidia card a dedicated device.