Simplest example from pfgplots documentation not working

Question

I get a lot of errors when I try to compile even the simplest examples with pgfplots. The following is taken from the documentation of the package:

\documentclass{article}

\usepackage{pgfplots}
\pgfplotsset{compat=1.5.1}

\begin{document}

  \begin{tikzpicture}
    \begin{axis}[
      xlabel=Cost,
      ylabel=Error]
    \addplot[color=red,mark=x] coordinates {
      (2,-2.8559703)
      (3,-3.5301677)
      (4,-4.3050655)
      (5,-5.1413136)
      (6,-6.0322865)
      (7,-6.9675052)
      (8,-7.9377747)
    };
    \end{axis}
  \end{tikzpicture}

\end{document}

I get more than 30 errors of the following type:

! Illegal parameter number in definition of \pgfmathresult.
<to be read again>
                  1
l.11       ylabel=Error]

You meant to type ## instead of #, right?
Or maybe a } was forgotten somewhere earlier, and things
are all screwed up? I'm going to assume that you meant ##.

Strangely, the produced pdf output contains the (visually) correct plot.

I'm using TeXLive 2009, pdfTeX, pgfplots 1.5.1, pgf 2.00.

edit: I believe that this has something to do with my system (missing or old packages?) but I'm not sure. Maybe someone has seen this before?

Answer 1

As was determined in the comments the problem is with the version of pgf you are using. Update to pgf v2.10 to resolve the issue.