SQL CREATE LOGON - can't use @parameter as username

Apparently CREATE LOGIN only accepts literals. You could try wrapping it in an exec and building it as a string:

EXEC('CREATE LOGIN ' + quotename(@username) + ' WITH PASSWORD = ' + quotename(@password, ''''))

edit: added quotename for safety from sql injection attacks

Posible solution:

sp_addlogin @loginame = 'test', @passwd = 'test', @defdb = 'test'