Here's the script I use to check the local group to see if the see if the group has already been added to avoid error message if you try and add a user/group that already belongs to the local group. If the domain account/group doesn't exist, it adds it. I know this doesn't answer your question about your error, but it might help you out in other ways.

code:
IF "@PRODUCTTYPE" = "Windows 2000 Professional"
 SHELL "COMMAND.COM /E:1024 /C net localgroup Administrators > c:\Admins.txt"
 OPEN (1,C:\ADMINS.TXT,2)

:READAGAIN

$X = READLINE (1)

IF INSTR ("$X", "Domain\Domain Admins")
 GOTO END
ENDIF

IF INSTR ("$X", "The Command")
 RUN I:\SCRIPTS\BIOPOWER1.EXE
  GOTO END
ENDIF

GOTO READAGAIN

:END

Close (1)
Del C:\Admins.txt

ENDIF