I got this error repeatedly (32-bit Win XP) until I let the Device Manager do what it seemed to want to do and install the device twice.
First time, it saw the new device and decided it was an Arduino Leonardo. I pointed it at the folder servotor32.inf file and it installed okay. Then when I tried to upload the servotor32 to the board, after the reset the Device Manager said it saw a new device (known and expected with Leonardo) and did I want to install drivers for it? I skipped that and let the Arduino IDE continue trying to upload … and it would error out with the “it’s not a butterfly” error.
Somewhere on the web I found mention that the device driver has to install twice. So I tried again and this time, after the reset and it saw the new device, I told it to go ahead. This time it offered me the option of “Arduino Leonardo” or “Servotor32”. I chose the latter and pointing it again at the Servotor folder. After it went through that it said my device was installed and ready to use and everything uploaded fine. (I did it a couple of times just to be sure.)
In there somewhere I restarted my system a couple of times, and somehow ended up with my device on COM4 instead of COM3, but it works. 
(This is why I usually use Linux, but the only clear work area I have at the moment has a Windows box on it for some other software I was using.)