Hi Jon, 
I had the same Problem. You can create a new DB by modifying the
create_demo_db.cmd in Programs\sapdb\depend\misc.
For the GUI you need the user needs the permission to logon as batch job and
logon as service.
see
http://www.sapdb.org/7.4/htmhelp/bf/e3c635d0998e4be10000009b38f839/frameset.
htm Messages Explanation: The DBM server could not log on to the operating
system or the command used requires it to be already logged on to the
operating system. User action: Check you entries as well as the
authorizations assigned to the respective user. Under NT, the user must have
the authorization logon as batch job. The current DBM server user must also
have authorization to log on under a different user account.
This should help, 
Dr.Waldemar Urbanek 

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