I have run into this several times recently and almost every time, there is a different cause.

The current situation happened at a customer where one user could not promote any emails into CRM, either from customer contacts or other CRM users.

Digging around a bit, I found this newsgroup thread with a mention of the following KB Article:

933234: Error message when you try to track an HTML-formatted e-mail message that contains an image in the signature in Microsoft Dynamics CRM 3.0: "An error occurred promoting this item to Microsoft CRM"

This particular article lists two possible causes:

•  The forms cache in Microsoft Outlook is corrupted.

•  The Microsoft Outlook temporary folder contains too many files. By design, Outlook has a limitation of 99 duplicated names that can be saved to the same image. Therefore, Outlook cannot read the embedded image when you have more than 100 e-mail messages with the same image.

 

In my particular case, the solution was to delete Outlook's temporary Internet files.

 

Thanks to Guy Shokrani for posting the solution on the newsgroup.