PROBLEM
Recently while recreating Service VPS (VPS ID 1) on a Windows Virtuozzo Node it was getting failed with following Error:
ERROR: Cannot adjust logon rights for vzagent user
SOLUTION
The error “Drop logon user rights” could fail when
1) the previous attempt of the service container recreation failed or
2) the vzagent user has the different then the default password.
This problem can be fixed by following steps (please, read the whole message, before proceeding):
1) Open Computer Management Console from Start >> Administrative tools >> Computer management (or just right-click on the My Computer icon of the Start menu and choose “manage”)
2) Expand “Local users and groups” section and enter into “Users“.
3) Locate vzagent user and remove it.
Try to re-create the Service VPS.
About Milind Koyande
Milind Koyande is the Senior Research Engineer and his job is to work with new technologies, specially Cloud Computing / Virtualization Technology. His past projects include Government Sector initiatives, Backup and Disaster Recovery Solutions.
Milind Koyande is the Senior Research Engineer and his job is to work with new technologies, specially Cloud Computing / Virtualization Technology. His past projects include Government Sector initiatives, Backup and Disaster Recovery Solutions. Follow him on 
