Did you copy the game from your "My Computer" drive to the desktop? If so, you need to move it to the Mac OS 8 disk you also have on the desktop. You shouldn't run any programs that you copied from My Computer to the desktop. Any files copied this way are not really on the MacOS8 disk and might cause problems.
There is a Carbonlib update available on Apple's site. Please try to install that.
I copied the Reckless Drivin folder to the macos8 disk and it is still giving me the error. I tried installing the CarbonLib update (1.6) but it is telling me that it needs OS 8.6 or higher installed. I'm downloading the official 8.6 upgrade. Will it work on the Old World ROM I'm using?
I only had a very short look at the help part of the game, but it runs fine with SheepShaver OS8.6 OldWorld ROM (or Rosetta) on my 10.6.8 AMD box.
Your mileage may vary of course and I dont have a 8.1 volume ready for testing.
The error you posted, is most likely due to old or missing software, as I can reproduce it with OS7.6.
Quitting game gave me a disk related error and made my 8.6 volume unbootable, so beware!
What do you mean by unbootable?
EDIT: Got hold of an 8.5 disc. I'm going to use that so that I can update to 8.6. This unbootable thing is concerning me. Can that be avoided using task manager to close SheepShaver?