SOURCE: system error
My harmony remote had the "system error 1" I called Logitech and they said that it is a hardware failure and the remote is faulty. After about 3 days they issued an RMA and sent me a new remote with no questions asked. I didn't even have to send the old one back! It took them a little while to get the ball rolling, but it did work.
SOURCE: weird battery size
Here's a link on the Directv forums. They suggest putting a small ball of aluminum foil between the positive terminal on the battery and the contact on the remote.
http://forums.directv.com/pe/action/forums/displaysinglethread?rootPostID=10316895
SOURCE: logictech harmony 550 universal remote trouble shooting
take out the batteries.when you are finished hold the #2 button while you put your batteries in and when you are finished it will say upgrade complete and then press any button.
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I have essentially the same problem except my remote is working fine in spite of the "replace batteries" message. It's just kind of annoying.
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