What was the source of the files you're trying to process ?
Are the CDG files that you imported directly from CDG discs, or created yourself with Karaoke Home producer? If so they should work.
Here's one thread dealing with that error message. If you'll search "Invalid CUE SHEET command at line 4" you'll come up with several other threads all saying basically the same thing.
http://forum.mtu.com/showthread.php?...T+command+line
George