What browser are you attempting to connect on?
Are you already logged into Facebook? If not, I would suggest doing that before trying to connect (re-logging might even help if you already are logged in).
I just tested this myself and got the same error: App Not Setup: The developers of this app have not set up this app properly for Facebook Login.
I actually disconnected from Facebook to do it. I'll forward this information over to the programmers.
Have the programmers taken Facebook Connect down? Mine is now missing from the sidebar.
