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Error 001 appears when a game is played from DVD-R instead of a disc. The string for this error can be found in the SDK and is detected by reading at an offset after the end of a Wii disc but before the end of a DVD-R.
Consoles with a 128MB MEM2 seem to not show this error; this may mean development units use a 128MB MEM2 (and load from DVD-R), although it is unclear what the extra 64MB would be used for.
Error 001 also requires IOS30 or higher (but below IOS254) to be shown. While most titles with error 001 code were set to run under IOS30, the updated Internet Channel NAND Boot Program shipped with IOS15 and IOS21 runs under the respective IOS, despite having the error 001 code.