Basically, your computer isn't fast enough for what you're doing.
Increasing the buffer size will result in greater performance for mixing and playback. You'd be able to use more vsts, more tracks etc, but you'll have noticeable latency.
Decreasing the buffer size will reduce latency but will also mean you computer may struggle to play back and record with large numbers of tracks and/or effects.
I think it's similar to a buffer in old portable cd players. It keeps say, a second ahead in memory, so if there is a skip, memory can fill in the blanks, but technically you hear everything one second late (except the thing you're recording).
Your options are to do one of the following.
1: Remove all other devices from firewire bus. If you have an hdd or whatever, unplug that.
2: Optimise your PC. Disable antivirus and any other unnecessary programs.
(google msconfig)
3: Upgrade your PC. Use system monitoring tools to find the weak link. If the firewire message isn't accurate, it's likely to be hard drive, memory or cpu.
4: Render some of your tracks so you have fewer real time effects.
5: Bus some of the tracks to a common effect instead of having several instances, if possible.
6: Disable some of the tracks and reduce buffer size for recording, then re enable the tracks and increase buffer size for mixing.
7: Same as 6 but create a stereo bounce of your mix to use as a recording backing track. Line the bounce up with the originals, and disable all the original individual tracks while you record.
You would still decrease buffer size to record then increase again to mix.
