The following error is thrown when trying to use the default confluence style in a theme as defined below:

<theme key="hostedtheme" i18n-name-key="com.atlassian.confluence.extra.hosted.theme.name" name="Hosted Theme" class="com.atlassian.confluence.themes.BasicTheme">
...
<param name="includeClassicStyles" value="false"/>
<resource type="stylesheet" name="confluence.css" location="/templates/hosted/theme/confluence.css" />
</theme>

The cause for the errors appears to be the following part from the css:

form#quickSearch

{ margin: 2px; padding: 0; }

form#quickSearch input

{ font-size: 10pt; vertical-align: middle; }

If you remove or rename qickSearch, the error disappears.

ERROR:
------------------------
Sep 30, 2007 12:45:43 AM org.apache.catalina.storeconfig.StoreLoader load
INFO: Find registry server-registry.xml at classpath resource
Sep 30, 2007 12:45:43 AM org.apache.catalina.startup.Catalina start
INFO: Server startup in 47064 ms
2007-09-30 00:45:55,271 ERROR [http-8080-Processor25] [opensymphony.webwork.dispatcher.VelocityResult] doExecute Unable to render Velocity Template, '/styles/combined-css.vm'
– action: main-action
org.apache.velocity.exception.ParseErrorException: Lexical error: org.apache.velocity.runtime.parser.TokenMgrError: Lexical error at line 3229, column 17. Encountered: "{" (123), after : ""
at org.apache.velocity.Template.process(Template.java:181)
at org.apache.velocity.runtime.resource.ResourceManagerImpl.loadResource(ResourceManagerImpl.java:466)
at org.apache.velocity.runtime.resource.ResourceManagerImpl.getResource(ResourceManagerImpl.java:384)
at org.apache.velocity.runtime.RuntimeInstance.getTemplate(RuntimeInstance.java:814)
at org.apache.velocity.runtime.directive.Parse.render(Parse.java:196)
at org.apache.velocity.runtime.parser.node.ASTDirective.render(ASTDirective.java:153)
at org.apache.velocity.runtime.parser.node.ASTBlock.render(ASTBlock.java:94)
at org.apache.velocity.runtime.directive.Foreach.render(Foreach.java:344)
at org.apache.velocity.runtime.parser.node.ASTDirective.render(ASTDirective.java:153)
at org.apache.velocity.runtime.parser.node.ASTBlock.render(ASTBlock.java:94)
at org.apache.velocity.runtime.parser.node.ASTIfStatement.render(ASTIfStatement.java:109)
at org.apache.velocity.runtime.parser.node.SimpleNode.render(SimpleNode.java:271)
at org.apache.velocity.Template.merge(Template.java:296)
at com.opensymphony.webwork.dispatcher.VelocityResult.doExecute(VelocityResult.java:91)
at com.opensymphony.webwork.dispatcher.WebWorkResultSupport.execute(WebWorkResultSupport.java:116)
at com.opensymphony.xwork.DefaultActionInvocation.executeResult(DefaultActionInvocation.java:263)
at com.opensymphony.xwork.DefaultActionInvocation.invoke(DefaultActionInvocation.java:187)
at com.opensymphony.xwork.interceptor.AroundInterceptor.intercept(AroundInterceptor.java:35)
at com.opensymphony.xwork.DefaultActionInvocation.invoke(DefaultActionInvocation.java:165)
at com.atlassian.confluence.util.LoggingContextInterceptor.intercept(LoggingContextInterceptor.java:48)
at com.opensymphony.xwork.DefaultActionInvocation.invoke(DefaultActionInvocation.java:165)
at com.atlassian.confluence.security.actions.PermissionCheckInterceptor.intercept(PermissionCheckInterceptor.java:47)