Aha, have you got all the .ino files open, or just polargraph_server_polarshield.ino? There should be 16 .ino files in the folder.

Next thing would be to make sure all the libraries are in the right place (arduino sketchbook/libraries). Use the copies of the libraries in the zip rather than downloading the newest ones from their sites. If you get stuck, remember that using the precompiled hex is usually the best way to get things working quickly.

It's actually best to use the freshest hex off the github site (save as -> https://github.com/euphy/polargraph_server_polarshield/raw/master/polargraph_server_polarshield_24.cpp.hex), a helpful reader pointed out a rather heinous error that is present in the current zip (https://github.com/euphy/polargraph_server_polarshield/issues/3).

I am in the process of getting a new bugfix release ready, and that will happen on github rather than google code (code has stopped allowing downloads / file storage). I've got to get the hang of the github way of doing it, but as of this minute, look to Polargraph download on github for the most current stuff.

That won't have anything to do with your error however.
sn

Right the hex files are precompiled versions of the firmware, so you don't have to mess on with getting your libraries and everything lined up just so.

You upload a hex file to your arduino using either avrdude or something prettier like xloader. There's a blog post about it. The down side is that there doesn't seem to be an equivalent of xloader for macs.

Avrdude is the firmware loader that lives underneath the arduino IDE though, and Dan Newman's comment on that page above shows the way to do that. In fact, all Xloader does is build that command line and fires it off.

Don't follow the links to the firmware on that page, the links in the previous post are the ones to go with!

good luck!
sn