The LiteSpeed backup completes successfully, the LiteSpeedLocal and LiteSpeedCentral databases are updated. The SQL msdb is updated correctly. The error message references the login for the user running the LiteSpeed Activity Manager service.
From the SQL Server Error log:
Log SQL Server (Current - 5/24/2012 11:22:00 AM)
Login failed for user 'INSTANCE\USERNAME'. Reason: Token-based server access validation failed with an infrastructure error. Check for previous errors. [CLIENT: <named pipe>]
Permission in SQL Server.
Check out this post at Microsoft:
You can give the user in the error message Admin rights.
Without changing the permission level:
"In SSMS, to the databases msdb and master and removed all users and schemas with the name "DOMAIN\SERVER$". Then in the global Security / Logins I removed this user as well. Then I recreated the user. This fixed the problem and the message went away."