During a normal setup of a medium farm configuration for MOSS, when running the SharePoint Products and Technologies (PSCONFIG) wizard - I would receive the error, "The account is invalid. The account must be a local account or global domain account."
Having deployed several dozen MOSS farms by now, I was perplexed after spending an hour checking and triple checking the service account (a least privileged domain-level account). All appeared to be just fine.
The server I was installing on was a member server of the domain, and when checking the properties of the server, it was listed properly as <serverName>.domainName.suffixName
So, what was going on?
Googling the issue turned up nothing; TechNet turned up nothing. I was stumped.
I deleted the user account on the PDC and re-created it - no joy.
Then I did some other digging... The NIC in this machine had an issue not long ago. Specifically, when it was joined to the domain - there was a different NIC in the computer that failed not long ago. Alas... The MAC address/machineName were foobarred in Active Directory. All appeared well on the surface. Until I tried a simple little test; login to the host as a domain account :) I quickly got the message that the domain was not available or that my machine name was not registered in the PDC.
After finding this - it was a quick fix - unjoin the domain, bounce the host, re-join the domain - and all is well.
Hopefully this will save someone some time.