How can I create a Windows Server 2008 domain user that AD RMS will accept?

I am trying to get basic LDAP authentication running on Windows Server 2008 (for testing purposes, so running in VirtualBox on an Ubuntu 12.04 host). I am installing Active Directory Rights Management Services. To do so I need a domain user that is not the administrator I am using to install AD RMS.

I have created the domain user in "Active Directory Users and Computers". I have also created them through "User Accounts" (thinking that could be the step I missed out). However the users credentials are not accepted by AD RMS, nor can I log onto the machine using their credentials (I get "You cannot log on because the logon method you are using is not allowed on this computer").

I have tried using gpedit.msc to add Users to "Allow log on locally" but I can't edit that setting (it has a lock icon next to it).

Is there any obvious step or setting that I have missed out on? What do I need to do to create a domain user that the AD RMS installer will accept?