Under the knowledge base you can do a search for the message and see a list of all of the results, but it looks like it's because you have a number of SolidWorks versions installed.
From the knowledge base under Solution Id S-027743...
"Q. What should I do if I get the error message “Failed to create parametric component” and what does it mean?
A. The error message “Failed to create parametric component” is related to a *dll incompatibility between different versions of SolidWorks on the same machine. It disables the parameter definition and the use of Design Scenario in SolidWorks Simulation (COSMOS), except for the latest version.
You can just ignore the error message, if you want to use an older version but you do not need parameter definition and Design Scenario in this version. If you want to use the parametric definition in an older version, there is a workaround available:
1. Find the installation folder of the latest SolidWorks version (e.g. 2009)
2. In there open the Simulation (COSMOS) folder and search for “parametricobject.dll”.
3. You might fine more then one. Select the one which is not related to SimulationXpress (COSMOSCpress) and copy it.
4. Paste it into a location where you can fine it again. This is you backup copy.
5. Find the installation folder of the SolidWorks version you want to use the parameter definition (e.g. 2008).
6. Repeat steps 2-3
7. Paste it in to the location where you found the “parametricobject.dll” of the latest SolidWorks version (e.g. 2009). The “parametricobject.dll” in the latest installation folder must basically be replaced by the older version (the version you want do define the parameters in).
Parameter definition and Design Scenario should work fine for the version selected in step 5. It will not work in any other version, including the latest version. You have to repeat the steps above to change the version in which the parameter definition is enabled. Use the back up copy in to allow parameter definition for the latest version."
There are a number of other Solutions and SPR's raised for this message including one which is related to the message appearing when you have Beta 2011 installed!
Dear Matthew McKnight,