Most often we get "Microsoft Dynamics CRM has encountered an error" for various reason as shown below.
If you receive a lot of errors like this while using Dynamics CRM 2011, you may already know that you can change your personal options to automatically send these error reports to Microsoft, or to never send this. This will mean those errors will not pop up on your screen anymore as they will automatically be handled. Most of the time however, we have several users who are all going to experience this same issue, and so we don’t want to have to go through each users login to change their personal options! Fortunately, there is a way to globally define this setting. This means you can decide to send or not send errors to Microsoft for all users, so that this type of error message doesn’t bother another user ever again!
To define this global setting, navigate to Settings, Administration, and then click on Privacy Preferences.
You can then choose whether to automatically send or not send error reports. The recommended setting here is to automatically send errors, so that Microsoft can fix these in future rollups.
Once you click ok, the changes will be applied. If you (or any other users) try and set their personal options now, the ‘Privacy’ tab will be removed, as it is now managed at the organization level. If any of those errors ever occur again in the future for any users, they will not be annoyed by a pop up message.
Hope this would be useful!!