OctroTalk has some issues connecting via ActiveSync. Please remove the sync cable, and OctroTalk should be able to connect fine using wifi, gprs/edge/cdma etc.
BTW, OctroTalk has progressed very well, and now supports MSN/Yahoo/AIM/ICQ as well as GoogleTalk.
Spike: What this means is that the software is unable to make a network connection to Google’s servers. Are you sure your internet is working, and you are not on a limited connection (WAP).
The software tries to connect to talk.google.com on port 5222, and that is failing.