You may received this error if you are using SQL Server express with Windows Vista or Windows 7 and authentication mode is windows. This error can occurs if current user is not administrator. If current user is administrator right click on SQL Server Management Studio and run it as administrator. This error will gone.
You may faced this error if you have installed Visual Studio 2010 on your machine with SSMS 2005 Express. What happens is that VS 2010 install SQL Server 2008 Express and on trying to connect to SQL Server 2008 database instance with SSMS 2005 Express cause this error. Some of feature of SSMS work normally but one thing that do not work is design mode of a table. Solution is simple use SQL Server 2005 Express with SSMS 2005 Express and for SQL Server 2008 Express edition install SSMS 2008 Express 🙂