ERR is the initials of the Electric Railroad Co.
The recommendation to use an alkaline battery is to see if the board will operate with a known good battery. Since the ProtoSound 1 (PS1) board assumes there is a NiCd battery connected, it will constantly charge it (which will wear out an alkaline battery, and thus isn't recommended for extended use).
Running PS1 locomotives with a CW-80 is a hit-or-miss proposition. Protosound 1 circuit boards like to see track power as a pure AC sine wave like that produced by a postwar transformer. Modern transformers often electronically chop off parts of the AC wave to vary the voltage, producing power that on an oscilloscope looks like a series of shark fins (example video).
The earliest PS1 boards were programmed to not come out of their initial power-up state if they saw anything like a shark-fin wave. Later PS1 boards are less fussy, but overall, you'd at least want to have some sort of postwar-style transformer on hand to test the loco just in case you do resurrect it (say with a reset chip or a new battery), but it turns its nose up at the CW80's power.
---PCJ