We've successfully tested Neatline 1.1.1 on Omeka 1.5.3. Just did a fresh installation myself, and I don't get that error. That said, I've only checked on installations with PHP 5.3.x, and not 5.2.x. The system requirements for Omeka[1] do specify PHP 5.2.4, so I'm not sure if there's something with that older version of PHP you have that might be causing this.
Curious if you get the same error installing one of the other plugins that come with Omeka, like ExhibitBuilder. That plugin also has call to `add_translation_source`. If you don't get a similar error activating that plugin, then there might be something in Neatline causing the error.
Best,
Jeremy