As per thread title, this error appears if the skin name is already used, presumably it is meant to show the existing skin rather than a box of red text...

Quote :

FZR_WKD.jpg : A skin with the same filename as your skin already exists. Please rename your skin.<div id="skinPrev658389" class="z100 lyr_shadow1 w_128 h_128" style="background: transparent url('/dynamic/skinthumb/FZR/658389-0.png') no-repeat top left;"></div>