Had this many times before. Something in your MSDE installation got overwritten probably.
If this is your server computer, BACK UP your data - manually if you have to. I can't stress this enough. You will need to restore your database later... I would actualyl find the .mdf and .ldf files themselves and back them up. Search this forum to get previous threads on this. If this is just a POS or back office computer, no worries. Just follow the directions below.
From Control Panel/Add Remove Programs:
- Remove RMS - Remove MSDE
Restart computer
- Reinstall MSDE (it will do it automatically if it is not found during RMS installation) - Reinstall RMS
It seems that some software installations, including Windows Updates and other Microsoft software installations, corrupt part of the MSDE configuration or files. This is the only procedure I have found to correct the problem. You might find posts about re-registering dll files, but this has never worked for me.
Good luck!