I think I had a similar problem as this, as far as I can remember I deactivated the user then created them again. I would only do this a s a last resort though, maybe the CRMDiag4Tool as suggested above will show what's wrong.
You could try deactivating then activating the user, then see if you can change the business unit.
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by: Aftab_KhateebPosted on 2009-07-23 at 20:38:54ID: 24932124
Hi
Can you please enable tracing using CRMDiag4Tool (available as a free download) to generate a log file and send us the error information. You could also enable DevErrors to see more information of the error. Once done, please upload the error information and log file(error section) here and we can have a look at it.
Aftab