Both, welcome to the forum
ashkell, a couple of things come to mind: Do you have one of the new D3-2 drives? DriveKey (like most other modchips) doesn't work with this type of drive.
If this is not the case, it could be a faulty installation. Try checking the cables again and make sure they are connected correctly to the DriveKey and the Wii disc drive. Also, it is essential that the DriveKey insulation sticker (or similar insulation means) is applied correctly. Finally, make sure the dip switches are correctly set to the same region as your Wii.
It doesn't sound like an error with the DriveKey chip, as the problems previously seen have been related to playing original games only.
@rascjp: The same goes for you. If you keep having problems, please confirm that you too have an American NTSC Wii and that you get the same error message when trying to play both original and backup games with DriveKey installed.