Error on using tokens in the alias

Please specify where you are trying to use this token?

you can only use the replacements that are allowed in the collapsed replacement fieldset for use path setings. [author-name-raw] is not one of the allowed options. [author-name-raw] can be used in the node path settings. It is important to expand the replacement fieldset for each path settings section to understand what tokens are available at that path.

the tokens available at user path settings are:

[user]
User's name
[user-raw]
User's unfiltered name. WARNING - raw user input.
[uid]
User's ID
[mail]
User's email address
[reg-date]
User's registration date
[reg-since]
Days since the user registered
[log-date]
User's last login date
[log-since]
Days since the user's last login
[date-in-tz]
The current date in the user's timezone
[account-url]
The URL of the user's profile page.
[account-edit]
The URL the user's account editing page.

I can't recreate your issue on my test site using the latest -dev release. The only time I am presented with the error you've cited, is when I try to use a token I shouldn't be using.

I don't have time to set up a fresh test site with 6.x-1.1 of pathauto at this time.

This module is widely used, it seems odd that a bug would be present in this way. Are you absolutley sure the "message" you are calling an error is the exact same when you use [user-raw] in user path settings? If so, feel free to remark this as a bug.

Though the issue may lie with token and not with pathauto. Which version of token.module is in use?

In my web site I use the default users/[user-raw], and I am not getting any message errors; the module set the aliases as it should do.

It's clear that this is a problem he has with his Drupal configuration (maybe the token.module is not the right version). Differently, the issue should have been reported by much more people, as users/[user-raw] is the default value set by the module.

I am not having your issue, so I guess the problem is not caused by the module.

Maybe it's simply the version of token.module that is not the one pathauto.module needs; maybe there is a problem with another module which causes the issue (I still think that the first hypothesis is more plausible).
The maintainer cannot find the reason of the issue you only see (like I already explained, if somebody else would have had your problem, they would have reported it) without to know exactly what your Drupal web site configuration is.

I don't think this is a problem anymore with latest pathauto or token modules. Please re-open if it's not the case.