I've never seen, or heard of that error before, but it has nothing to do with the volume slider, that's fine.
The only thing that I can think of offhand is that GB is unable to write to the project file you created, which could be a permissions problem, or a corrupt file.
First try creating a new project and see if the error persists. If it does, try repairing permissions. What the heck, I'd also delete GB's pref files (Search your Hard Drive for "GarageBand" and delete the files that end in ".plist" and ".cs")
Let us know if any of that helps.