Varying variable causeing error

In hopes of understanding TSE and correcting some errors I am getting let me try to clarify what each part of the shading system there is, hopefully Brian or Ben will also bring some clarity

Vertex Shader

The Vertex shader takes in Attribute variables as incoming data structures. The structures contain all the information which could be changing at every vertex, such as vertex's position, color, normal and texcoord#.(see shaderGen/shaderComp.h/.cc)

struct VertData
{
	float4 position        : POSITION;
            float4 texCoord        : TEXCOORD0;
};

Alternatively, Uniform variables are variable that will be changing less often, they pertain to the whole shape like the modelview matrix or a lights' position. You must bring them in as augments in the main function

Conn main( VertData In, uniform float4x4 modelview : register(VC_WORLD_PROJ),
			     uniform float4x4 texMat        : register(VC_TEX_TRANS1)
)

note the syntax semantic variableType variableName : register(define#)

The define# can be found in the shdrConsts.h file.

Finally you might note the return type is Conn, this is another structure designed to hold the Varying variables, which are variable that are passed from the vertex shader to the pixel shader.

struct Conn
{
   float4 HPOS               : POSITION;
   float2 outTexCoord    : TEXCOORD0;
  };

Ok Great
So in its most basic form the Vertex shader is only responsible for placing the vertex's position.

{
   Conn Out;
   //take vert and get coord by transforming by modelviewmatrix
   Out.HPOS = mul(modelview, In.position);
   //set base texture coord
   Out.outTexCoord = mul(texMat, In.texCoord);
   return Out;
}

So lets look at the
Pixel Shader

As we just said varying variables are passed from the Vertex shader to the Pixel shader, so we will make a similar structure to receive the data being transferred. Notice there is no Position variable because the vertex shader already has set it.

struct ConnectData
{
   float2 texCoord          : TEXCOORD0;
};

We will also need an outgoing structure for the pixel's color

struct Fragout
{
   float4 col : COLOR0;
};

As before uniform variables can be pulled in as an augment to the main function

Fragout main(ConnectData IN,  uniform sampler2D baseTex      : register(S0)
)

The Pixel shader is responsible for deciding what color the pixel will be

{
   Fragout OUT;
    OUT.col = tex2D( baseTex, IN.texCoord );
}

Alright Great. After reading several examples I am under the impression if you want to send other varying variable across that are shader specific one would pass them in a TexCoord#

However when I do I get the error

warning X4707: texcoord inputs used directly (that is, other than sampling from textures) in shader body in ps_1_1 are always clamped from 0 to 1
(1): error X5088: Too many arithmetic instruction slots used: 14. Max. allowed (counting any co-issued pairs as 1) is 8.
(1): error X5089: Total number of instruction slots used too high: 16. Max. allowed (counting any co-issued pairs as 1) is 12.

Why?