Without getting into great detail, with that Final Cut is telling you that it can't render what visual effect you want (have applied to a clip or nest) in high-precision because of one of two things (or both).
1. Your graphics card simply can't handle it. You'll need to upgrade.
2. If you're lucky you can adjust a setting and render in slightly less than "high-precision" with some caveats.
A: Highlight the sequence that has the troublesome clip & effect in it in the Browser and hit Command + 0 for Sequence Settings. Fortunately, in here, changes you make DO apply to the current sequence.
B: Click on the Video Processing tab and you'll see something like this:
See the four radio buttons on the left? Try setting your sequence settings to something other than it currently is. RGB is usually good for this problem.
But read the two paragraphs of text to the right there. Rendering with different Video Processing settings can cause colors to go all wonky.
C: Hit OK and test, test and test some more.