UPDATE!!
After restarting the CRS 5.0 Server the error is not showing anymore, with exception to one agent showing a shared extension error.
http://www.cisco.com/en/US/products/sw/voicesw/ps556/products_tech_note09186a00801786cb.shtml#prob2
An agent is unable to log into the Cisco Agent Desktop and receives this error message:
Login attempt failed due to Peripheral Offline
This error can occur when the Resource Manager-Contact Manager (RMCM) subsystem does not start due to an invalid login/password for the RM JTAPI user. In other words, this could be due to a password mismatch between the RM JTAPI user and the JTAPI user.
In order to resolve the issue, synchronize the JTAPI user and the RM JTAPI user passwords and restart the CTI Manager service.
Note: Make sure that the password for the RM JTAPI user is set to never expire. If the password expires, it can lead to the password mismatch which then results in this error.
Regards,
zak