That is what happens if you copy wallet files around. If you copy your wallet file to a second computer, then they both think the money in the wallet is theirs. If one spends any of it, the other doesn't know those coins are already spent and would try to spend them again, and that's the error you would hit.
Now that it's clear this is a key error message, it ought to be something more like "the money appears to be already spent... this could happen if you used a copy of your wallet file on another computer."
You can move or backup your wallet file, but it needs to have only one "lineage" and only used in one place at a time. Any time you transfer money out of it, then you must no longer use any previous copies.
This brings up a good point. In the case of restoring a backup that may be from before you spent some coins, we need to add functionality to resync it to discover which coins have already been spent. This would not be hard to do, it just hasn't been implemented yet. I'll add it to the list. This would make it mostly repair the situation instead of giving that error message.
BitcoinTalk
#2From:
satoshi
Subject:
Re: Bitcoin crash when sending coins
Date: