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This article describes the potential compatibility issues in using domain user accounts ending with the dollar sign ($) as a service account.
Original KB number: 2666116
Summary
Starting in Windows 7/2008R2, there are potential compatibility issues with using domain user accounts ending with the dollar sign ($) as a service account. Managed service accounts are identified by ending in a dollar sign ($). The system may evaluate the account as a managed service account and block the change.
More information
In the services console, if you enter a user account in a trusted domain that ends in the dollar sign ($), it will warn you that "The name provided is not a properly formed account name." This occurs because managed service accounts can't be used in a trusted domain.