JSI Tip 1729. Exchange Service Attendant service won't start due to logon failure?

When Exchange setup tries to start the Exchange Service Attendant service, you receive a message that the service did not start due to a logon failure. When you press OK, you receive an additional message stating that the account information is incorrect. When you OK again, you are asked to select another Service account. Setup now completes successfully.

When you were initially prompted to select the Service account, the Browse dialog returns group names, in addition to user names. If you select a group name, setup mistakenly accepts it, causing the subsequent failure.