The theme is using the imagecreatefromjpeg() function, which is needed for the "hover auto color" feature in the portfolio grid. And this function needs two things to work properly:
- allow_url_fopen to be enabled on your server (otherwise the theme cannot open the thumbnails for image processing)
- The GD Library (1.8+) installed and running on your server.
Make sure that you have these ok - ask you hosting company about the issue if you don't know how to fix it yourself.
Otherwise, if you don't want to enabled the mentioned setting, you will have to settle without the auto-color function. The errors that you see are not crucial (and only you will see them each time you update or interact with the portfolio items in the backend), but if they are annoying you and want to disable them, you should disable reporting on your site.