Would somebody who encounters this error like to help me with a little investigative work?
I'm on Win7 so these directions apply to that OS.
If you click the start button, type into the search box at the bottom of the start menu...
compmgmt.msc
...then hit enter.
In the 'Computer Management' window's left pane, click 'Local Users and Groups'.
If you don't see a left pane or 'Local Users and Groups', click the 'Show/Hide Console Tree' icon on the toolbar.
Can you report what folders are there are in the local users and groups?