Receive "An unexpected error has occured." message every time I create new site with "Use unique permissions" option

Hi,

I got error every time when I do the followings to create a new site:

1. Select any of the sites
2. Click on "More Options"
3. Type in Title, Description, URL name
4. Select "Use unique permissions" in the "Permissions" section
5. Select "Yes" in the "Navigation Inheritance" section
6. Click "Create"
7. On the "Set Up Groups for this Site" screen, select "Use an existing group" in any of the sections

I've found the events regarding to this error in the log files but it doesn't provide much info or I don't understand what it's trying to say.

Any help to get this error resolved would be appreciated.

Thanks,
Arion