I have just found this in the FAQ. It may help some:

Q. When I complete the final dialogue box, during registration, Paltalk freezes.

A. Try this test out: Start up a DOS window and at the prompt type "telnet 209.67.17.227 5002".
When you press the Enter key a window should come up that says "Hello".
If this does not happen, then you will probably not be able to connect from the computer and location you are currently dialing from.

If, however, you did receive the 'Hello' in the box, then what you need to do is download a special program by clicking on this link. Save this program to your desktop and run it. It is called 'regfixer.exe'. It is a tiny DOS console application which should pop up a DOS window very briefly and then disappaear. Then try the registration or logon once again. This has been known to fix many connections. Please write to support@paltalk.com and let us know if this helped you or not.

Note: If you are an America Online or Compuserve user and you are getting this message, or if you cannot hear the person you are talking to (or vice versa) your best bet would be to switch to a free ISP such as Alta Vista, NetZero, FreeI.net or any other of the range of free providers out there. Your Paltalk woes should end there.

Jon