This one is funny..Source

Well, the title says it all. If the host you’re trying to install SCVMM on has a name that contains “-SCVMM-” in upper case letters, setup fails with Error 257.

Example: MUC-SCVMM-1

Resolution: Use a slightly different name, like “MUC-SCVMMR2-1″ or “MUC-SCVmm-1″,

The reason is that the uppercase string “-SCVMM-” is used internally for host cummincation by SCVMM.

 

Cheers

Robert