Hi GhostRider007,
Normally when this happens, it\'s due to the front-end (Joomla) not communicating with the back-end (opensim). This normally appears when something isn\'t configured correctly, or there need be a hole poked in the firewall between servers.
Some error while connecting to OpenSim occured.
Did you by chance take a look at your logs? /bin/OpenSim.log , apache logs, etc.. This will usually tell you exactly where the problem is based on the error. ex:500 or 403 (apache) or what had happened in the opensim log. Does your users show up in Joomla/OpenSim under users? Can you manually add a user from the OpenSim prompt? Or is this just an error when adding a user from Joomla? If Joomla, front-end or back-end? What version of com_opensim do you have installed?
Might need a bit more information to help on this one. But anytime you see error connecting, it should show up in a log as to what connection error has happened, and more so than not, usually a config error or a firewall etc.. not allowing the connection. If not you can also turn on Joomla debugging in the main Joomla configuration.