You will typically see this message if the Security Accounts Manager file (SAM) is corrupted or missing. The SAM file is responsible for storing passwords for Windows and is where it stores all the user account information. The file is stored in %systemroot%\system32\config\sam.
To fix this problem you need to either restore or replace the SAM file. There will be a backup copy located in the C:\Windows\repair folder.
If you do not have a backup of this file outside the computer but you can get to the command prompt in Windows, Safe Mode or a boot disk then you can copy the SAM file from the repair folder using a command prompt. Keep in mind you cannot use the Recovery Console to perform this fix since it requires authentication, which cannot occur if the SAM file is corrupted. You also cannot fix this by doing a repair installation of Windows.
Click Start, click Run, type cmd (or command if you are using Windows Me or Windows 98), and then click OK.
At the command prompt, type each of the following commands, pressing ENTER after each command:
copy c:\windows\system32\config\sam c:\windows\tmp\sam.bak
delete c:\windows\system32\config\sam
copy c:\windows\repair\sam c:\windows\system32\config\sam
Note This procedure assumes that you have Windows installed in the following default location (c:\windows). If not, substitute windows with the name of your system folder.
Restart the computer