I have resolved the problem on the site where I was having problems.
Here’s what I did.
1. Disabled “all plugins”
2. By doing this I identified it wasn’t a BuddyPress Problem
3. Tried to login on as a vanilla WordPress site. If you cant login you are confirming this is not a BuddyPress issue but a WordPress issue.
4. Ran the script written by Mark Jaquith found here: http://markjaquith.wordpress.com/2006/03/28/wordpress-error-you-do-not-have-sufficient-permissions-to-access-this-page/
5. I checked the user on the Vanilla WordPress site, I logged in OK.
6. I re-initialised all BuddyPress Plugins and Themes
7. I was able to log in. (Yeah Team!)
Seems like this problem hasn’t gone away on 1.7.1.
I’ve tried the above solution with little joy.
1. My customers setup is a sub-site from their primary site.
2. I tried disabling all the plugins except for BuddyPress. No joy there
3. Tried adding define(‘BP_ENABLE_MULTIBLOG’, true); to wp-config on the sub site and primary site, no joy there either.