Sorry to bump an old topic, but I had this error as well and was pulling my hair out trying to figure out how to fix it. So here's the solution for anyone else that's having issues. Gotta love the wikki site.
Under the
variables section of your database, check the
LoginType entry and make sure it's set to
Public if you're using a public login server. If you're using
minilogin, it should say
Minilogin.
If you update your database with some of the ones released here (which are pretty awesome btw), or ran a miniloging server beforehand, make sure that table is set correctly. Sometimes the changes don't take effect or get overwritten (obviously) if you update it with a different database.
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