Hi Shaning,
127.0.0.1 is what is known as the "loopback", and is the same as "localhost", both of which mean the computer your working on. So if your computer has a "real" IP of 10.59.66.102, you could use any one of these three items in the "Server" box in the GeoEvent Simulator: 127.0.0.1, localhost, or 10.59.66.102.
If GeoEvent is installed on a different machine, then for "Server", you must enter the IP or machine name of the machine on which GeoEvent is installed.
No matter which is the case, you must have created a TCP input in GeoEvent Manager ("Receive Text from a TCP Socket") on the GeoEvent machine. This TCP input is what the GeoEvent Simulator is trying to connect to. If there is no TCP input running on the machine and port you specify in the Simulator, you will receive the error you are seeing.
Mark