Occasionally this comes up with a users attempts to print a MS word document. However when this happens I can verify the printer does actually work by opening notepad, pdf or event internet explorer and hit print while the error is still up and it prints just fine. Logging off the terminal server and back on fixes it. I have replaced the printer, the driver and reset the print spooler. No luck. I have changed print configurations to install it locally and using a print server. Doesn't seem to matter and very random.