If you try to swap users on a laptop, with Dynamics CRM installed in Offline Access mode, it will give the error above; searching gave me this page from the Chinese Dynamics CRM team, so I’m just going to repeat it here:
C:\>osql –E –S localhost\CRM
1> drop database mscrm_msde
Basically, you connect to the SQL Server on the local computer, and delete the Offline Access database, allowing you to reconfigure as normal. Note that this won’t let you reconfigure the user as “online only” – the new configuration will automatically be Offline Access.
Secondly, this works even if the user is not Local Administrator on the computer.