The performance counter category ‘Memory’ cannot be accessed on computer ‘COMPUTER1’ (Timed out trying to read performance counter category ‘Memory’ on computer ‘COMPUTER01’); check that the category and computer names are correct.

Solution

Performance Monitor Security settings

The test controller account must be in the Performance Monitor Users group of all machines performance data will be read from. User who is trying to access performance data (locally/remotely) should be part of  ”Performance Monitor Users” and “Performance Log Users”. If there are not much security concerns make the user part of Local “Administrators” group which will ensure full access on the machine.

Load test timeout settings
 
If permission levels are all fine. But still you are still running into the same issue. That means you have to set load test’s performance counter initialization time out settings. But where to do that? as there is no provision to do it though VS IDE. For that you have to do some manual configurations in load test’s hosting process’s configuration file. Now this configuration file is different for VS 2008 and VS 2010. Following are the details on that.
 
For Visual Studio 2008, open the file VSTestHost.exe.config in the folder C:\Program Files\Microsoft Visual Studio 9.0\Common7\IDE
OR
For Visual Studio 2010, open the file Devenv.exe.config in the folder C:\Program Files\Microsoft Visual Studio 9.0\Common7\IDE
AND then add following entries to it. That will solve the timout issue.
 
<appSettings>
      <add key=”LoadTestCounterCategoryReadTimeout” value=”60000″/>
      <add key=”LoadTestCounterCategoryExistsTimeout” value=”60000″/>
 </appSettings>