This error was reported by SQLSERVER....
The actual problem was due to a duplicate SID in my windows machine.
How did this duplicate SID issue come up? I found that it was because this machine was due to cloning another Virtual Machine.
The solution is to run SYSPREP...It generates a new SID. But,beware....You can only do it thrice on a Windows 7 pc.
Really wish we had errors that were more user friendly in Windows.