Sucks to be those five billion people, that's for sure!
After settling two worlds (Mars and another world) as the Terrans in a Tiny Galaxy against the Krynn and Drengin I've found myself unable to colonize another world. I first noticed it with a Class 11 planet in the Drexler system.
I have the save in question, should anyone want to check it out. Bummer too, I was excited to get things rolling now that Beta 2 let me use my discrete graphics card and get decent (wonderful, actually) performance.