From Nikon website:
 
Having a "System Error" message display on the camera's LCD display generally indicates a problem where the camera will need to come to Nikon for repair. A System Error is a general error which can be caused by many things: lens problem, CF Card problem, general camera failure, etc. Before sending the camera in, check these:
 
 
   1. Use the memory card that originally came with the camera (or a Nikon approved card)
   2. Remove and replace the battery  
 
If the error is still displayed, contact Nikon's Service Department (below). If the above tips do not help the camera must be sent to Nikon Service, there are no user serviceable parts on Nikon Coolpix cameras.
We apologize for the inconvenience and will do everything we can to repair your Nikon camera as quickly as possible.