Replace the user dictionary with a copy from the zip you downloaded from your account. PHP users may also need to replace the uncompressed lexicon (american or british.tlx).
The error occurs when a user pastes content from Word containing magic quotes and then adds a word with magic quotes to the dictionary.
This will be corrected in ActivSpell 2.0 by replacing characters 8211, 8216, 8217, 8220 and 8221 with ASCII equivalents.