I was using a people picker which was filtered to only use a particular sharepoint group! If I, as site collection administrator, accessed it, it worked fine and i was able to select a person. However for anyone else this did not work!
Solution:
Well, it worked out that all the users needed to be added to this list in order to get it working. I even tried to set the permission of the lists in the User permission List itself, gave them full control but still nothing.
This is due to the settings of the group you have specified in the "People Picket Column"
Browse to the group which you have the people picker set to, check the group settings Who can view the membership of the group? Group Members * Everyone (check Everyone) now the error you had before of "the control is not available because you do not have the correct permissions" should be gone…..