This is one of the toughest scenarios that we get into Product Support and there hasn't been a definitive solution is this error:
Unable to run AutoCAD. This may be due to one of the following reasons:
1) This version of AutoCAD was not installed properly.
2) You do not have sufficient rights to run AutoCAD.
This is a screen capture from Windows XP.
We recently had a case in which the error was happening on Windows 7. The user was running AutoCAD 2010. During the installation of Windows 7 Service Pack 1, the system hung and had to be rolled back to its previous state. After the rollback, AutoCAD ceased to work. The user just re-applied the Windows 7 Service Pack 1 and the issue was resolved.
The suggestion is to apply a Service Pack to your Windows computer if you are getting this error otherwise, you will need to reinstall the operating system.
Thanks to Steven Costa for this tip.