If you install the latest release of the MySQL admin suite (ie: Administrator 1.1.8 and Query Browser 1.1.20) you might get this error message (attached) when starting one of those programs.
The old user@localhost is moved to a folder in the MySQL Administrator's Connection Manager named 'HISTORY' and that is the reason for this error message. You shall only delete the root@localhost in that HISTORY folder of Administrator's Connection Manager , and NOT in MySQL server user management (as you would do with from SQLyog menu .. tools)!
I think it is a very confusing thing the MySQL GUI team do here. I don't see the reason for this. Some issue with prevous versions of MySQL Admin-GUI programs (such as the backup functionality of Administrator) that need to be fixed? Or a new concept/idea of some kind?
I repeat: This error message is related to MySQL Administrator's Connection Manager only and not to the MySQL server or any other client such as SQLyog!