Can't set up free account to use "find my iPhone" app

Hi,
Just did the update to 4.2 and followed the instructions in setting up the mobile me account (free version) to be able to use the new feature of "find my iphone" app but it won't let me use my apple ID, it keeps saying use another ID which I don't have? My Apple ID has already been verified so i don't understand the problem. Please advise. Thanks.

On which device? the iPhone or the MacBook Pro that got stolen?

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