I am using hibernate 3 with spring with HSQLDB. I keep getting this error. Help please. Does this have something to do with hsqldb?

18:08:28,123 WARN SettingsFactory:103 - Could not obtain connection metadata
org.apache.commons.dbcp.SQLNestedException: Cannot create PoolableConnectionFactory (socket creation error)
at org.apache.commons.dbcp.BasicDataSource.createDataSource(BasicDataSource.java:855)
at org.apache.commons.dbcp.BasicDataSource.getConnection(BasicDataSource.java:540)
at org.springframework.orm.hibernate3.LocalDataSourceConnectionProvider.getConnection(LocalDataSourceConnectionProvider.java:80)
at org.hibernate.cfg.SettingsFactory.buildSettings(SettingsFactory.java:72)
at org.hibernate.cfg.Configuration.buildSettings(Configuration.java:1463)
at org.hibernate.cfg.Configuration.buildSessionFactory(Configuration.java:1004)
at org.springframework.orm.hibernate3.LocalSessionFactoryBean.newSessionFactory(LocalSessionFactoryBean.java:767)
at org.springframework.orm.hibernate3.LocalSessionFactoryBean.afterPropertiesSet(LocalSessionFactoryBean.java:693)
at org.springframework.beans.factory.support.AbstractAutowireCapableBeanFactory.invokeInitMethods(AbstractAutowireCapableBeanFactory.java:1003)
at org.springframework.beans.factory.support.AbstractAutowireCapableBeanFactory.createBean(AbstractAutowireCapableBeanFactory.java:348)
at org.springframework.beans.factory.support.AbstractBeanFactory.getBean(AbstractBeanFactory.java:226)
at org.springframework.beans.factory.support.AbstractBeanFactory.getBean(AbstractBeanFactory.java:147)
at org.springframework.beans.factory.support.BeanDefinitionValueResolver.resolveReference(BeanDefinitionValueResolver.java:176)
at org.springframework.beans.factory.support.BeanDefinitionValueResolver.resolveValueIfNecessary(BeanDefinitionValueResolver.java:105)
at org.springframework.beans.factory.support.AbstractAutowireCapableBeanFactory.applyPropertyValues(AbstractAutowireCapableBeanFactory.java:957)
at org.springframework.beans.factory.support.AbstractAutowireCapableBeanFactory.populateBean(AbstractAutowireCapableBeanFactory.java:768)
at org.springframework.beans.factory.support.AbstractAutowireCapableBeanFactory.createBean(AbstractAutowireCapableBeanFactory.java:330)
at org.springframework.beans.factory.support.AbstractBeanFactory.getBean(AbstractBeanFactory.java:226)
at org.springframework.beans.factory.support.AbstractBeanFactory.getBean(AbstractBeanFactory.java:147)
at org.springframework.beans.factory.support.BeanDefinitionValueResolver.resolveReference(BeanDefinitionValueResolver.java:176)
at org.springframework.beans.factory.support.BeanDefinitionValueResolver.resolveValueIfNecessary(BeanDefinitionValueResolver.java:105)
at org.springframework.beans.factory.support.AbstractAutowireCapableBeanFactory.applyPropertyValues(AbstractAutowireCapableBeanFactory.java:957)
at org.springframework.beans.factory.support.AbstractAutowireCapableBeanFactory.populateBean(AbstractAutowireCapableBeanFactory.java:768)
at org.springframework.beans.factory.support.AbstractAutowireCapableBeanFactory.createBean(AbstractAutowireCapableBeanFactory.java:330)
at org.springframework.beans.factory.support.AbstractBeanFactory.getBean(AbstractBeanFactory.java:226)
at org.springframework.beans.factory.support.AbstractBeanFactory.getBean(AbstractBeanFactory.java:147)
at org.springframework.beans.factory.support.BeanDefinitionValueResolver.resolveReference(BeanDefinitionValueResolver.java:176)
at org.springframework.beans.factory.support.BeanDefinitionValueResolver.resolveValueIfNecessary(BeanDefinitionValueResolver.java:105)
at org.springframework.beans.factory.support.AbstractAutowireCapableBeanFactory.applyPropertyValues(AbstractAutowireCapableBeanFactory.java:957)
at org.springframework.beans.factory.support.AbstractAutowireCapableBeanFactory.populateBean(AbstractAutowireCapableBeanFactory.java:768)
at org.springframework.beans.factory.support.AbstractAutowireCapableBeanFactory.createBean(AbstractAutowireCapableBeanFactory.java:330)
at org.springframework.beans.factory.support.AbstractBeanFactory.getBean(AbstractBeanFactory.java:226)
at org.springframework.beans.factory.support.AbstractBeanFactory.getBean(AbstractBeanFactory.java:147)
at org.springframework.beans.factory.support.BeanDefinitionValueResolver.resolveReference(BeanDefinitionValueResolver.java:176)
at org.springframework.beans.factory.support.BeanDefinitionValueResolver.resolveValueIfNecessary(BeanDefinitionValueResolver.java:105)
at org.springframework.beans.factory.support.AbstractAutowireCapableBeanFactory.applyPropertyValues(AbstractAutowireCapableBeanFactory.java:957)
at org.springframework.beans.factory.support.AbstractAutowireCapableBeanFactory.populateBean(AbstractAutowireCapableBeanFactory.java:768)
at org.springframework.beans.factory.support.AbstractAutowireCapableBeanFactory.createBean(AbstractAutowireCapableBeanFactory.java:330)
at org.springframework.beans.factory.support.AbstractBeanFactory.getBean(AbstractBeanFactory.java:226)
at org.springframework.beans.factory.support.AbstractBeanFactory.getBean(AbstractBeanFactory.java:147)
at org.springframework.beans.factory.support.BeanDefinitionValueResolver.resolveReference(BeanDefinitionValueResolver.java:176)
at org.springframework.beans.factory.support.BeanDefinitionValueResolver.resolveValueIfNecessary(BeanDefinitionValueResolver.java:105)
at org.springframework.beans.factory.support.AbstractAutowireCapableBeanFactory.applyPropertyValues(AbstractAutowireCapableBeanFactory.java:957)
at org.springframework.beans.factory.support.AbstractAutowireCapableBeanFactory.populateBean(AbstractAutowireCapableBeanFactory.java:768)
at org.springframework.beans.factory.support.AbstractAutowireCapableBeanFactory.createBean(AbstractAutowireCapableBeanFactory.java:330)
at org.springframework.beans.factory.support.AbstractBeanFactory.getBean(AbstractBeanFactory.java:226)
at org.springframework.beans.factory.support.AbstractBeanFactory.getBean(AbstractBeanFactory.java:147)
at org.springframework.beans.factory.support.DefaultListableBeanFactory.preInstantiateSingletons(DefaultListableBeanFactory.java:275)
at org.springframework.context.support.AbstractApplicationContext.refresh(AbstractApplicationContext.java:317)
at org.springframework.context.support.ClassPathXmlApplicationContext.<init>(ClassPathXmlApplicationContext.java:80)
at org.springframework.context.support.ClassPathXmlApplicationContext.<init>(ClassPathXmlApplicationContext.java:65)
at org.springframework.context.support.ClassPathXmlApplicationContext.<init>(ClassPathXmlApplicationContext.java:56)

doublecheck your connection parameters and availability of the DB.

that deosn't really help. What connection parameters should i check? THe database still starts and my app still works but i don't understand why i get this error.

all the DB connection parameters, you should be able to connect to the DB with using those parameters.
Try them in tool like http://squirrel-sql.sourceforge.net/