Sadly, I'm having the same problem with my Joomla! installation. If someone tries to register from the frontend the same error message is displayed. The user is put into the database, but is not approved or confirmed. I try to confirm and approve them manually but it doesn't work. If I got to CB's tools menu and sync user tables, the users are all approved and confirmed.
If I try to add a user from the backend, I get the same message and must follow the same steps to fix it.
I have admin approval and email confirmation turned off in configuration.
I have CB RC2 installed on my mambo 4.5.3 installation and it works just fine. Fortunately I haven't put my joomla site into production yet.
Does anyone have a fix for this yet? I've searched the forums but haven't really found any.
Thanks