Working on my first SQL 2K5 application here...and came across this error trying to implement the SqlNotificationService. I read a lot on this error...However, I was able to avoid this error by simply making the current user of own the DB.
1. Security > Users > [select the user your application is accessing the DB as]
2. Select properties (right click)
3. Find and check your DB schema in the list of "Owned Schemas"
4. Ensure "DB Owner" is checked off in the "Role Members" list
That's it...