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I was creating a user with encrypted home directory usnig "adduser --encrypt-home username" when I got the mentioned error.
To solve this, you need ecryptfs-utils... so,
sudo apt-get install ecryptfs-utils
will do it for you. But, if you try run "adduser --encrypt-home username" again, you will get an error saying
ERROR: Cannot get ecryptfs version, ecryptfs kernel module not loaded? adduser: `/usr/bin/ecryptfs-setup-private -b -u username' returned error code 1. Exiting.
so, I restarted my server with
sudo shutdown -r now
This happened to me on a fresh install of ubuntu 10.04
PLEASE let me know if I'm doing something wrong, or if you have any suggestions or requests~
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