I would completely uninstall Activesync and install version
3.7.1. Make sure it is installed BEFORE you put your Axim in the cradle to sync. If you are still getting this error, go to Tools -- Options -- and uncheck all the items to be synced. See if you are able to establish a connection that way first. If yes, add each item step by step.
Also, have you tried doing a soft reset on your Axim or rebooting your PC?