Hello!
An error of type 12 is very uncommon these days. It where common on System 7 but should almost not happen with OS 9.X. I have never once seen anyone on this forum have a Type 12 error when running LW. So it sure is a uncommon problem. An error of type 12 means that your Operative System tryed to use an Unimplementet Core Routine. Meaning that the OS encountered an Unimplemented Trap number. Those numbers are generated by the Trap dispatcher and contains instructions to the application when executing a specific function. In this case LW or Mac OS was unable to perform a specific instruction and the Microprocessor generated the error.
The cause of this could be one of the following:
-Not enough memory/or memory available but not usable to perform instruction. Most common if you are using Virtual Memory. If you have 320MB of physical RAM or more then you should turn off VM. If you have less then you should increase the amount of VM to atleast 193MB. But in general LW hates Macinosh type of VM and runns badly when VM is turned ON on Classical Mac OS. Another memory related issue is if you have Broken RAM in your computer. Look under About This Computer window does it display all of the installed RAM. When it comes to VM maybe you are starting to get a small amount of space left on your HD so that Mac OS is unable to use all the VM required. You should also increase the amount of memory assigned to the Java Runtime Environment application MRJ 2.2.5. If you are using an older version then upgrade to the 2.2.5 version available trough Apple's Knowledge Base. After the installation assign 32000 as the maximum value but dont touch the minimum setting. Then uninstall everything LW on your System and then download a fresh copy of LW and re-install that one instead. LW will now use the new JRE. Then Re-start your Mac and see if LW will run good.
When downloading LW make sure that you are downloading the proper version for your OS. LW 2.9.8 seems to work for most people. You can get it here:
http://www3.limewire.com/download/2.9.8/